Journalcrunch: Menu levels problem

Hi, I’m using Journalcrunch (site5) for my website https://www.offerteviaggihotel.it

My menu has always been like this:

Europe
-country1
-country2
-etc

You hover on “Europa” and you see what i mean. While rearranging “Italia”‘s sub-levels it all got messed up. Whenever i try to add categories under the menu item “italia” they are all automatically set at the same level. So no drop down menu but the full list of names one next to the other on the menu bar.

Please note that “italia” is parent category of those categories.

Perhaps the issue is having updated WP to 3.4?