I think you are probably missing some CSS for the admin page, and it’s likely due to the edits that were made. Since you’ve made significant edits, I am not going to recommend going back to the stock theme. You are going to have to fix your current theme, and without someone here able to log in as admin, they would not be able to see what’s broken.
Check out the file loggedin.php in your template. The admin menu includes this file to display “welcome your_name….”. So if you have some img or lists or anything different from a span or p, that file is probably breaking the menu layout.
Is there a way to get the latest posts highlight to, instead of highlighting the title bar and the first post, skip the first post and then highlight the second post first? (To avoid having a very thick highlighted top plus the first post)