I found it at last! and in my case it was NOT due to conflict with other plugins NOR caching.
In the Adminimize setting page under 'Admin Bar Options' there is '(top-secondary)' option that hides the 'hello user / logout' menu on the admin bar. When this setting is used (i.e. deactivated for specific role) it takes over the 'User-Info' settings (as expected) HOWEVER it affects ALL blogs in the network rather than the specific blog where this option was set.
Frank, if you need more information let me know... and thanks for a very useful plugin!
manyu.singhal, hope it helps you and others :)