Expanding Box-type of problem in IE

[Chromer]

I am just beginning the process to update this old site. (www.mirrorliteco.com) There is nd a persistant problem in IE that i neglected to solve which I'd love to clear up before moving on. Assuming this is the Expanding Box Problem, I have tried using overflow: hidden to the containings elements with screwy results. I think its probably something simple, but alas, I am defeated.

In the left column navigation box, you'll see the bottom is extended below the rounded corner graphics in presumably all IE browsers up to v7.

Any ideas? Will post whatever code would help...