[Dan Zollman]

Any chance you could post an example of a full web page using this, so we can see it in context?

I'd try taking each element (first level ul, first level li, second level ul, second level li, ...) and going through the stylesheet to see which properties apply to it. (Or, using Firebug extension in Firefox or Chrome/Safari's web inspector, inspect the styles on each element.)

Check which properties from the second level are also affecting the third level and make sure they are being overridden if necessary.

Finally, look at the positioning on each level--if it's being absolutely positioned, what is the position relative to?