This is a known bug, reported here. It also chokes if $HOME is longer than 25 characters.
I was able to work around this by applying a patch (which increases the limit from 20 to 50) and rebuilding from source.
The patch is in this message. It doesn't apply to the screen-4.0.3 sources downloaded from ftp.gnu.org; apparently it depends on some unreleased changes added after that.
(Note: When I downloaded the patch, it named it bin4fE4KxGNNI.bin; I manually renamed it to gnuscreen-21653.patch.)
So I grabbed the latest screen sources from git:
git clone git://git.savannah.gnu.org/screen.git
applied the patch:
patch -p 1 < gnuscreen-21653.patch
then built from source:
./autogen.sh
cd src
./configure --prefix=/where/you/want/to/install
make
make install
This gave me a screen executable that I can run from /home/accountwithaverylongusername on my Linux system. It should work the same way on OSX.
If your user name is longer than 50 characters, you can probably just update the constant after applying the patch.
I hope this patch, or something like it, will appear in the next release of GNU screen.