I cannot produce the problem you describe, when I edit an excerpt directly it still shows the read more link. The only thing I can think of that would break it is if there is invalid markup in the excerpt like a missing closing tag or an extra closing tag somewhere.
Can you try to produce the problem on demo.mojoportal.com?
One thing to note is that the excerpt length is only used/enforced if excerpts are generated automatically (in which case markup is removed and the excerpt is plain text so that we avoid leaving out any closing tags which could happen if we arbitrarily truncate markup to a set length). Once you enter something directly in the excerpt it uses whatever you enter there as is and just appends the more link.