There is approximately a 100 character limit if I recall a recent post by TSGal over in Report an Issue correctly, but maybe the fact that you have multiple values separated by returns is a factor. See what happens if you use substitute to replace the returns with spaces, and sort on that calculated value instead of the return separated list. Does that produce the results that you expected?
Thanks Phil. I added another similar field just for sorting. Used the substitue to remove the returns and spaces and it's working good now.
PS - I had the substitue syntax saved from a previous answer you gave me on Lists.