Adding Custom Menu Item removes the link

Hi,

We are facing a strange issue as described below which needs urgent attention:

We have created a custom menu, enabled it to sidebar first block. We have enabled that block in certain pages so far so good.
Whenever we update any of the links in the custom menu and save it, the menu link disappears from the block and comes on top as a primary link. Even disabling the option to create the 'Primary Menu Link' for that particular entry did not help, in turn the link disappears from the custom menu and primary link item. Weird !!
We have to manually update the custom menu again to make the link appear again. All the data remains in tact but strangely any updates to custom menu removes the link.

Not sure if this is reported previously but a weird thing keeping us on hold from taking the site live.

Sarang