Filter Posts By Category Not Working

Category Widget
With no drop-down list checked:
If you click on any category, you get the unfiltered (full) list
With drop-down list unchecked:
None of the defined categories are listed

This also impacts the Thesis Theme “Killer Recent Entries” widget which depends on the selected Category.

Example site: http://www.TheDoctorWeighsIn.com/

Problem: Filter Posts by Category does not work.