Please Help Newbie! Cant set up widget menu

I want a drop down menu on each page of my site (sidebar) with all the category listing links. Tried but it shows categories but no links?
Working on creating site but realized that I will have too many categories to list in the sidebar menu (ex: see homepage www.penntownship.biz/wp/ and I still have lots of categories to add yet...so have to change that, figured I can do it with a dropdown menu bar.
1) When I go to the widget area, select drop down menu, I get the categories showing but when you click any category, it says can't find page? (ex: go to homepage, click accounting, on Accounting listing page -see widget sidebar, click anything shown - nothing linked?)
2) What am I doing wrong? I'm so new at this whole wp thing, please give details on how to set up the sidebar widget with a dropdown menu that links up

 

We got your issue. We have fixed that related to your issue. Update your theme from either members area or theme update notification.

 

Is Version 1.5 the latest? reuploaded just in case..no change to menu links, still say embarassing, can't find?
ps. wp said i had no updates available. But I downloaded & re-uploaded the entire file from the member area anyhow like you instructed, with no difference...
(don't want to lose my data).

 

Support mail sent.

 

Solved thank you so much!!!