Here is a non-recursive, pure XSLT 1.0 solution:
<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output omit-xml-declaration="yes" indent="yes"/>
<xsl:strip-space elements="*"/>
<xsl:variable name="vUpper" select="'ABCDEFGHIJKLMNOPQRSTUVWXYZ'"/>
<xsl:variable name="vLower" select="'abcdefghijklmnopqrstuvwxyz'"/>
<xsl:variable name="vDigits" select="'0123456789'"/>
<xsl:variable name="vAlhanum" select="concat($vLower, $vUpper, $vDigits)"/>
<xsl:template match="comments">
<xsl:param name="pText" select="."/>
<xsl:choose>
<xsl:when test="not(string-length($pText) > 120)">
<xsl:value-of select="$pText"/>
</xsl:when>
<xsl:otherwise>
<xsl:variable name="vTruncated" select="substring($pText, 1, 121)"/>
<xsl:variable name="vPunct"
select="translate($vTruncated, $vAlhanum, '')"/>
<xsl:for-each select=
"(document('')//node() | document('')//@* | document('')//namespace::*)
[not(position() > 121)]">
<xsl:variable name="vPos" select="122 - position()"/>
<xsl:variable name="vRemaining" select="substring($vTruncated, $vPos+1)"/>
<xsl:if test=
"contains($vPunct, substring($vTruncated, $vPos, 1))
and
contains($vAlhanum, substring($vTruncated, $vPos -1, 1))
and
string-length(translate($vRemaining, $vPunct, ''))
= string-length($vRemaining)
">
<xsl:value-of select="substring($vTruncated, 1, $vPos -1)"/>
</xsl:if>
</xsl:for-each>
</xsl:otherwise>
</xsl:choose>
</xsl:template>
<xsl:template match="text()"/>
</xsl:stylesheet>
When this transformation is applied on the following XML document:
<news>
<title>Story title</title>
<comments> story gist here..a couple of sentences. Many more sentences ...
even some more text with lots of meaning and sense aaand a lot of humor. </comments>
<content> actualy story </content>
</news>
the wanted, correct result is produced:
story gist here..a couple of sentences. Many more sentences ...
even some more text with lots of meaning and sense