I never even realized, but I've been with RSS feed for a while (not even sure at which version of Atahualpa the feeds stopped working since I don't really subscribe to my own feeds, but I do have a 6.4.4 installation that seems fine)

Basically the feed gets a parsing error - XMP abruptly stops after <content:encoded><![CDATA[ when the permalinks are set to /%postname%/

Changing to a different theme resolves the issue (requires dumping browser cache)

So out of the following feeds only one works:

.../feed/ (doesn't work)
.../feed/rss/ (works)
.../feed/rss2/ (doesn't work)
.../feed/rdf/ (doesn't work)
.../feed/atom/ (doesn't work)

Once again I answer my own question

It turns out that I tested the following already but I forgot to dump cache between that and checking RSS and so I dismissed an actual cause of the problem as it looked like everything is honky dory

Today I tried installing nothing but atahualpa and importing a bunch of posts to see if a barenaked install produces RSS: all clear.

Cache dumped and loaded the Ata settings. Rss check: all clear
Installed my usual plugins, dumped cache and did an RSS check: all clear
Started activating plugins one-by-one (with the cache dump and RSS in between) when gremlins jumped out and clubbed me upside the head

So I'm happy to report that a combo of a "Allow PHP in posts and pages" plugin and Atahualpa caused my misery. Deactivating the plugin OR changing to a dif theme fixes a problem.

I think I'll deactivate the PHP plugin and simply iframe the product of the script into a post instead

Moderators - you can mark this post as solved