Dynamic Sidebar Categories based on current category

Hi folks:

I have a site and we are using posts for the majority of the content. We have categories, subcategories and a third level of child categories too. About 3 levels, perhaps 4. I want to put the categories in the sidebar for an alternative navigation. Some sections in the menu have their own sets of categories and do not cross to other sections. I need to set up a solution for displaying the current relevant category perhaps at the second level (could be top level though), and hide the siblings of that top or second level while in that category area.

So for instance:

Flora (Category level 1)
-Flowers (Category level 2)
–Petunias (Category level 3)
–Daisies

Fauna (Category level 1)
-Birds (Category level 2)
–Cardinals (Category level 3)
–Orioles

So, let’s say that I am looking at the category of Birds or Cardinals. How can I make the sidebar hide the entire “Flora” category and its children? And when I am looking at “Petunias”, how can I get the sidebar to hide “Fauna”?

I have tried a number of plugins but they are not able to handle this type of thing. I also tried changing the parameters in the category-template.php doc but they had no effect on the display.

Any ideas would be so helpful. I am fairly decent with coding, but would need to know which files specifically I would need to change if I change a template.

Thanks again