Here is an example of a sample site I did where the drop down menus are on individual layers http://gwpriester.com/menu-test/

I created my own buttons instead of using a pre-built nav bar. It requires more effort but the result in my opinion is well worth it.

Each layer can have it's own MouseOver layer, but you need to distinguish it with a number so MouseOver-1, MouseOver-2 etc.

MouseOver-2
Menu-2
MouseOver-1
Menu-1
MouseOver
MouseOff