So, I finally found a great replacement for Newsgator. Truth is, I found nothing. I just follow several months behind Tim Haines. First I moved to Sauce Reader because of Tim's Post Here, then when I mentioned my problems with it, he let me know about another one. Thanks Tim!
Anyway, although long overdue, I have been using Omea Reader from Jet Brains (same guys who make Resharper), for over a month. I have no doubts it is the best tool out there, and I have tried them all: Feed Demon, Sauce, SharpReader, RssBandit, Bloglines, Newsgator, and several others that aren't worth remembering.
Not only that, but the guys over there at Jet Brains seem really great. I sent over 3 bug reports this morning from a beta test I am doing and I got 3 personal replies within an hour. Technology aside, I would much rather support a company with a free product with great values, vs. Newsgator (which I even paid $29 for) which has stopped selling the Outlook edition in favor of a per month fee.