Okay, I got the menu and I have good news and bad news.
The good news is that I added the menu to a new project, threw in a couple of makeshift timelines, linked everything up and burned a disc. It plays and navigates perfectly in my Sony set-top player.
Unfortunately, the fact that I was successful is also bad news, because it deepens the mystery of why you weren't successful.
Some things to consider:
1. In PS, don't bother with pretty graphic images or layer effects for the highlight layer - they just end up being 2-bit solid images anyway. Your button highlight layers have a nice rounded rectangle graphic and a drop shadow - don't do that.
2. On my Windows XP system, the graphic and drop shadow translated to an aliased gray blob with the same shape as the rounded rectangle graphic. Encore translated the fancy highlight layer that you created in PS into that gray blob, which is exactly what Encore is supposed to do.
3. Is that the look you were trying to get for the button highlights? If so, then try going back to PS and making the highlight layers into the gray blob *before* you import the menu into Encore. Who knows? There may be some difficulty with the translation of the fancy layers to the blob layers on the Mac side of things.
4. Are you using Encore to burn the disc? If not, what software are you using? (Assuming you created a disc image or a set of DVD folders in Encore and then used another program to burn the disc.)
5. What brand of blank media are you using? Rated burn speed versus actual burn speed?
Changing any or all of these conditions may help. Or it may not. Let us know.
-Jeff
The Focal Easy Guide to Adobe Encore DVD 2.0