A Google News Help thread has two Google News users upset that they stumbled on pornography due to finding a story on Google News.
One person said he/she was searching for Clay Aiken and found nude pictures of his boy friend. A few hours later another person complained about seeing nude pictures, but didn't specify which site.
I have confirmed that some sites containing nude images are in Google news. Just do a site command on [site:pwspoilers.com] in Google News and the site containing nude images does show up in the Google News index.
Google News rarely is hit with pornography or nudity. It was once back in 2006 when a topless woman was on the cover of the Google News home page.
I am not sure if Google will take action on this too quickly due to the holidays, but they might.
Forum discussion at Google News Help.