I have added a screenshot of the problem. Unfortunately I had to rename the categories to post it external to the organization but it doesnt' matter.
Interesting note: when I look at q2a.org the categories list displays properly. diffed my .css against the one loaded by q2a.org and it's exactly the same.
So, it's either that the problem occurs after 2 categories or when you add subcategories (I have two), or there's some other plugin causing issues with layout?