I discovered the same problem exporting my Kontact calendar to my ipod. I googled it and found that the problem was the blank lines that Kontact puts in the ics/vcs file between calendar items. If you eliminate these blank lines, it will work. To quickly eliminate these blank lines, I use sed (streaming editor, an old unix tool). Open a terminal in the directory containing your exported calendar, and use the following command (assuming your exported calendar is "icalout.ics"):
sed '/^$/d' icalout.ics | sed 'w ./icalout.ics'
This will overwrite your exported calendar with one that the ipod can read properly. To create a new file, replace the second "icalout.ics" with a different name, and it will create a new file. You can then copy it to your ipod, and it should work. You can also put the path of the ipod calendar folder in the second part of the command, and it will write directly to the ipod. I use the above command and then copy the output to the ipod manually, so I have a backup copy of the data on my computer as well.
However, you will probably run into a second issue with your Kontact calendar. For some reason, the ipod (or maybe it's just a bug in mine) truncates large calendar files (and plain text files in the "notes" folder) to 12k. This means a large calendar must be split into multiple files after running the sed script. I am working on a perl script that will take care of both this issue and the blank line issue at the same time, and will post it here when I have a working script. Until then, cut and paste in a text editor works fine for me. Just put all the small calendar files in the calendar directory together, and it will look like one big calendar on the ipod. Hope this helps.