I fared worse than you, I couldn't get it to work no matter what screen res I used.
I'm not sure why you have the menu button on a separate layer, it should be on the MouseOff layer, so I moved it. Still nothing.
I messed around with all sorts of weird things before deciding to start from scratch.
Create layer named menu and create your content (I simply copy/pasted the content from your Pop Up Menu layer)
Select MouseOff and create a button
Link the button to menu
Utilities > Web Properties > Link (tab) > Pop-Up Layer (drop down menu)
Everything works as intended. Why your original didn't play ball, I can't answer, but I'd take a stab in the dark and guess it's a page attribute/setting rather than object/link thing.
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Menu Project Edit.web.xar <<<
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