I think you misunderstood me on "staying true to the page title"

If your website is about selling blue widgets and you page title is "blue widgets - johns widget corp" then you are "staying true to the page title" You are letting people and search engines know that this page is about blue widgets. Also "blue widgets - johns widget corp" is under 40 characters so this would not be the best example.

Your question was if you should change all your page titles to under 40 characters so that your entire page title would show. My answer / advise to you is; if you need more then 40 characters to properly describe your page then you should not change just so that all characters in your page title show.

I don't think you should change all the page titles on your site to 40 characters or less just to conform to Google's  new local SERPs.

The 40 character limit is what Google will show not what you are limited to use. The best advice I can give you is to be "true" to your page titles. If you need more then 40 characters to properly let search engines and people know what your pages are about then you should. Just don't add (stuff) an extra list of keywords to the end of your page titles.

Drop down menus do not typically effect SEO negatively. In fact a properly optimized drop down menu can be beneficial for letting Google know what your site and pages are for. Just a few things to check for:

1. Avoid Java script drop down menus - Use standard HTML or CSS driven drop downs instead.

2. Use live linked text and not images.

3. Use descriptive keyword in your drop down - For example a drop down for shirts use: Red shirt, Blue shirt, etc instead of just Red, Blue.....

4. Keep in mind the First Anchored text rule. Give seniority to your first anchored text link.

5. Make sure your links are absolute link. e.g.http://www.yourdomainname.com/services.htm

6. Use title attribute to describe the page the visitor will be taken to.