The usual fix for this is to place an iframe behind your menu bar. The iframe is one of the few elements that has priority over a drop down list in older version of IE. The iframe should obscure the drop down list and you can pop your menu over the top of it.
It isn't a nice solution, but this is the technique I have used many times to deal with this IE specific problem.
UPDATE
Here is a quick example of an iframe shim using JavaScript...
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN"
"http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">
<html>
<head>
<title>Example</title>
<style>
#overthetop {
position: absolute;
top: 5px;
left: 5px;
background-color: Yellow;
z-index: 1000;
}
#myiframe {
border: none;
}
</style>
</head>
<body>
<div id="iframeshim">
<iframe src="about:blank" id="myiframe"></iframe>
</div>
<div id="overthetop">
<p>Some</p>
<p>Content</p>
<p>Here</p>
</div>
<select name="test"><option value="test">Test</option></select>
<script type="text/javascript">
var overTheTop = document.getElementById("overthetop");
var iframeShim = document.getElementById("iframeshim");
var myIframe = document.getElementById("myiframe");
var w = overTheTop.offsetWidth;
var h = overTheTop.offsetHeight;
var t = overTheTop.top;
var l = overTheTop.left;
iframeShim.style.display = "block";
iframeShim.style.position = "absolute";
iframeShim.style.top = t + "px";
iframeShim.style.left = l + "px";
iframeShim.style.width = w + "px";
iframeShim.style.height = h + "px";
iframeShim.style.zindex = "900";
myIframe.style.width = w + "px";
myIframe.style.height = h + "px";
overTheTop.style.zIndex = "1000";
</script>
</body>
</html>