technically, it is _possible_ to use dynamic drop downs in this fashion, but to do so requires hand coding and is not supported.
when you add multiple record insert to the page, the form elements names get edited to add a counter to them
you need to edit the dynamic dropdowns populate list from array code to also use the counter in the name of the parent and child list.
if you need assistance setting this up, we can help in a premiere support appointment:
http://www.webassist.com/premier_request.php