I believe kgpg looks for the default terminal application in the KDE settings 
and defaults to Konsole when non is found, of course Gnome and KDE use 
different settings so that won't help you.
So I've attached a debdiff to add konsole to the dependencies of kgpg.

** Attachment added: "debdiff to add dep on konsole"
   http://launchpadlibrarian.net/11211507/kdeutils_3.5.8-1ubuntu5.debdiff

** Changed in: kdeutils (Ubuntu)
       Status: New => Confirmed

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KGPG requires Konsole
https://bugs.launchpad.net/bugs/181106
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