It looks like this:
The category dropdown and even locations dropdown seems to expand.
At first I thought my theme's (Bender_Black) CSS for messed up. So I re-uploaded my local main.css backup but the problem was still there.
Then I thought this might be an issue from some plugins. And voila! It was.
After disabling suspected plugins one by one, I found the plugin causing the problem - "Rich edit" plugin. After disabling the "Rich Edit" plugin from Admin Dashboard > Plugins > Manage Plugins, the issue is gone.
When downloading the plugin, I did not get any compatibility issue notice.
Hope it helps some one facing similar issues.
Ps: I did not check this issue with other themes.