So the extended characters all display correctly except for your menu label? That narrows down where the problem can lie. If the file is correctly saved, the only other place that could be the problem is your FTP client is using the wrong charset for text mode.
Usually the auto detect works fine, you might try a setting that forces UTF-8 to be used. Also, your PHP install may be using the wrong charset in its locale setting.
Run this from a PHP page on your server:
echo system('locale -a');
This lists all available locales, find your language_Country code with
.utf8 after it and make note of the exact text string. Let's say it's "cs_CZ.utf8". Add the following to your wp_config.php file so PHP is using the right locale:
This actually just sets the charset, the language and country are not changed. Use LC_ALL to change everything. It doesn't seem like it should matter for this issue, but double check with a hex editor that your text editor is not saving a byte order mark (BOM) at the beginning of the file. The first 3 hex codes should be 3C 3F 70 (for '<?p') and not EF BB BF. Some editors insert a BOM with no warning. In fact, anything in front of the "<?php" on non-template files can cause problems, not just a BOM. A good thing to check even without charset issues.