I have a site whose menu is functioning incorrectly in IE6, and only IE6.
A live preview of the site can be seen here.
The HTML & CSS are too long to post here but please view the source and the CSS.
I have implemented conditional comments and the IE6 Update jQuery plugin. Neither work.
I'm not sure how relevant this still is, but in my experience multilevel menus are a pain to implement cross-browser. IE 6 generally needs some extra help in the form of a Javascript.
I've used the Suckerfish Dropdown method on many occasions, which can be found here. It uses unordered lists as well and provides IE6 support in the form of a Javascript. It might require rewriting your own menu logic, though.
Try triggering hasLayout on any positioned object with css zoom:1. Also, give explicit heights wherever posible.