As long as Google doesn't publish their indexing methods, we will never know for sure. But I very much doubt spiders will ignore links because they are in hidden elements. Text and keywords, yes. But links? No. In my experience, all bots are greedy to index as much of the internet as they can.
If you want to make really sure, consider having a second menu that is never hidden, and that shows the current page's "neighbor" links. Maybe have all the links of the current category as small links in the footer. That way, you can be sure every link will be visible on some page that is reachable from a level-1 link from another page.
Actually, I think I have seen sites doing that even though they had drop-down menus. Maybe that's the reason.