In Descent 1st edition, the overlord hand size was restricted to 8. In reading the 2nd edition it says there is no limit--- is that still the case? (if so, seems to promote the OL just holding all his cards for the 2nd part of a 2 part mission).

No limit, it does.

In Descent 1st edition, the overlord hand size was restricted to 8. In reading the 2nd edition it says there is no limit--- is that still the case? (if so, seems to promote the OL just holding all his cards for the 2nd part of a 2 part mission).

In fact, hoarding cards for the second encounter is a very standard Overlord tactic in the game. This is due to the nature of when quest rewards are usually gained (the winner of the second encounter).

It also is a "balancing" factor for when heroes have cleared out the first encounter, and are not allowing it to end (are not meeting the win conditions) because they desire to search all of the search tokens on the board. While they are doing this, the Overlord is building a bigger hand. So, the heroes need to decide if it is worth it to drag out encounter 1, while allowing the Overlord to gain a stronger, more diverse hand for encounter 2.