A Google News Help thread has one news publisher saying he is receiving a news specific error in Webmaster Tools named "Unknown News Site."
This error is displayed if your Sitemap is on a site that is not in the Google News database. Google News can only accept Sitemaps from sites that we crawl. If your site is crawled by Google News, please check that the URL of your Sitemap agrees with the URLs of your articles as they appear on Google News, including any leading "www". If you would like to request inclusion of your site in Google News, please contact us.
The thing is, even if your articles are showing up in Google News you still may see this error. I am not sure if it is just a timing issue or not.
Forum discussion at Google News Help.
Update: Harvey P. from Google explained the error in more detail, he said:
This particular error occurs when the publication name you have on your sitemap, the value in the
tag, doesn't match with the exact name we have in our system. You can figure out which name we have in our system by doing an article search using our [site:] operator. The name listed in grey is the name we have in our system. Please make sure this name is reflected on your Google News sitemap.