I am having the same problem (which doesn’t help you, I know). I don’t understand the intricacies of escaping but perhaps it’s a problem with that? The feed my title generates is:
<title type="text/html" mode="escaped"><![CDATA[Laurel Lee & #8217 s books & #8211;]]></title>
(I’ve added spaces to prevent conversion of the entities)
Even if I retype a plain prime (‘) into the post, WordPress converts it to the curly (proper) apostrophe.
The Atom feed shows the entity codes, which is bad enough, but the RSS and RSS2 feeds simply crash with an XML parsing error. I’d be happy with even a workaround, like manually entering the unicode for the prime — haven’t tried that yet.