Using KGpg 2.7.1
10 using terminal it creates a 2048 DSA/GAMAL keypair with no problems and the generated pair also shows in the UI

In the UI the generation continuously fails with following eroor messages

gpg process did not finish. Cannot generate a new key pair.
gpg: -:2: invalid algorithm
gpg: -:10: missing colon

By the way the bug reporter states that KGpg 2.7.1 does not exist
How about updating it

Which distribution do you use?

Distribution

DISTRIB_ID=Ubuntu
DISTRIB_RELEASE=12.04
DISTRIB_CODENAME=precise
DISTRIB_DESCRIPTION="Ubuntu precise (development branch)"

See http://bugs.kde.org/253408

For now either install the gpg2 package or create a RSA/RSA key.

I am using gpg2
Using RSA/RSA with a 2048 keylength generates a 2048/1024 key and not a 2048/2048

That looks like an entirely different bug. Please report this to http://bugs.kde.org so it will not get lost.

Both issues have been fixed. The fixes will be shipped with KDE SC 4.8.3.

Thanks

I have a curious problem since I installed KGpg.

KGpg was installed using the Muon package manager. That was the only thing that was installed.

Today I found that all three Muon packages, the Muon Software Center, Package manager and Updater had completely disappeared from the system. Absolutely no trace.
Worse is that this happened without any request for action from the watchdog.

Ever heard of this before? This seems to me to be particularly serious since it overrides one of the mainstays of Linux, that you are in control of what gets installed - and conversely removed.

I would recommend ensuring your repositories are up to date, running "kbuildsycoca4 --noincremental" and checking using apt-get that they are installed.