In menu_design_mcl.inc.php , in function MenuItem , there is an error with the template images code:

Around line 94, you will see:

Code:
	$ret .= "<tr><td width=50><img style=\"display:none\" border=0 src=\"$site[images].${imagename}2$ext\" height=1 width=1></td><td valign=middle align=left>";
there is an extra . in the code - which results in broken image links for menu items.

change to:

Code:
$ret .= "<tr><td width=50><img style=\"display:none\" border=0 src=\"$site[images]${imagename}2$ext\" height=1 width=1></td><td valign=middle align=left>";