I believe that the main cause of your problem is that your RadChart does not use AutoLayout
(it does not detect that the width of the Y Axis Item labels is greater than the available space) and therefore does not try to improve its layout.
Setting the radChart.AutoLayout
should solve your issues.
I hope this helps.
All the best,
the Telerik team
If you want to get updates on new releases, tips and tricks and sneak peeks at our product labs directly from the developers working on the RadControls for ASP.NET AJAX, subscribe to their blog feed