Hello, my apologies for the length of time it has taken to get back to you. I had a check into the way that the module picks the latest products and I can't see that there is any obvious way that there could be a problem with this. The module simply orders the products by the Virtuemart product id, and picks the ones with the highest id. Because the id is always defined and increments each time a product is added then it is pretty much foolproof.
One possibility is that there was a problem with the products themselves, maybe the images were missing - if you have set up the module to not show the product when there is no image then nothing would show up.
However based on what you say it sounds more likely that it was a caching issue, there is a lot of caching going on, virtuemart caches a lot of product information, also there is the Joomla cache system, plus your web browser doing its own caching. It's probably a good idea to clear all three in this situation.
If you are still using VM 2.0.26d and you have not already fixed the problem you should know that it is vulnerable to a critical security issue that can allow an attacker to create an admin account on your site:
http://virtuemart.net/news/latest-news/462-security-release-of-vm2-6-10-and-vm2-9-9b
You should be able to fix it using the advice from the virtuemart team:
Exchange the file models/user.php
The easiest way is just to exchange the user model with the new one:
Dowload the latest version (VirtueMart 2.6.10 or VirtueMart 2.9.9b)
Replace the file /administrator/components/com_virtuemart/models/user.php with the new one.