Well, the developer answer - the info is in the source code, specifically the RSSToolkit that does the transformation from a feed source to the DNN RSSv2.0 format.  The transformation will not filter any custom area other than the number of items, whether to show the date, and details.  The reason is to provide a generic RSSv2.0 format that gives each transformed feed similar elements to display, pubDate, description, title, and link.  This is to allow the module to aggregate multiple feeds. Now, you would have to develop a 'new' custom XSL that extends the existing Default.xsl to do further filtering, which is possible, but there's a alternate solution.

My suggestion would be to move your RSSv1.0 feed and custom XSL to an XML/XSL module, which would allow you to keep the presentation model you have working in the similar fashion.  Unless, you need to aggregate the feed with others, I don't see much point in using the News module for any such existing custom usage.  The News module is going to 'mutate' the source feed into a DNN specific RSSv2.0 format, and that may not always be what you want or the best approach for a particular feed.

Just my thoughts...