The "region" setting for any DVD is actually created by the burner you used and so is not any "wrong" setting within Photostory.
You need to check the region setting of your burner by doing the following:
In My Computer right-click on your DVD burner and choose Properties.
On the screen that opens, click on your burner and then, at the bottom of that screen choose Properties. This screenshot shows my computer, where I have two disc burners and have highlighted one.
Clicking on Properties then opens this screen:
Click on the highlighted tab and you will find the option to change the region setting for your burner. Just take careful note of the warning that says you can make a maximum of 5 changes to this setting.