--- /Users/sbourget/Downloads/moodle/lib/navigationlib.php	2012-08-03 08:04:48.000000000 -0400
+++ /Applications/MAMP/htdocs/moodle23/lib/navigationlib.php	2012-08-17 21:59:45.000000000 -0400
@@ -1129,9 +1129,9 @@
 
                     $url = new moodle_url('/course/category.php', array('id' => $category->id));
                     $addedcategories[$category->id] = $categoryparent->add($category->name, $url, self::TYPE_CATEGORY, $category->name, $category->id);
-
                     if (!$category->visible) {
-                        if (!has_capability('moodle/category:viewhiddencategories', get_context_instance(CONTEXT_COURSECAT, $category->parent))) {
+                        if (!has_capability('moodle/category:viewhiddencategories', get_context_instance(CONTEXT_COURSECAT, $category->id))) {
+
                             $addedcategories[$category->id]->display = false;
                         } else {
                             $addedcategories[$category->id]->hidden = true;