There is a bug that can cause the Local root setting to be used in place of the remote root setting, it should be fixed in the next menu writer update.
Basicly in the menu.php file, line 6 is:
if (strpos($WA_curURL,strtolower($WA_localRoot)) == 0 && (strlen($WA_localRoot) >= strlen($WA_remoteRoot) || strpos($WA_curURL,strtolower($WA_localRoot)) === 0)) {
it should be:
if (strpos($WA_curURL,strtolower($WA_localRoot)) === 0 && (strlen($WA_localRoot) >= strlen($WA_remoteRoot) || strpos($WA_curURL,strtolower($WA_localRoot)) === 0)) {