Hi Mproject,
First of all, if you haven´t already, check out this article:
http://wiki.modxcms.com/index.php/Category_Tagging_with_Ditto
And then what I would do is create a folder, unpublished, called something like "News Categories", inside news categories create your 5 documents: Category 1, Category 2, Category 3 etc etc.
In category 1 content area you are going to make a ditto call that just calls the Category 1 tagged news items, eg.
[!Ditto? &summarize=`5` &total=`20` &tpl=`ditto_articles` &paginate=`1` &alwaysshow=`1` &sortBy=`createdon` &sortDir=`DESC` &trunc=`1` &truncLen=`300` &commentsChunk=`` &displayArchive=`1` &paginateAlwaysShowLinks=`1` &descendentDepth=`1` &tagDelimiter=`,` &tagData=`tvcategoryOptions` &tagMode=`onlyTags` &tags=`Category 1`!]
And continue like that in each document, and then wherever you want a dropdown to those items just create it by styling a wayfinder call that starts at the document id of your "News categories" pages.
Hope that made sense!
Good luck