I saw some unexpected behavior when working with live enhancements off. In creating a new project or editing an existing one, the only options in the parents select box are goals. In other words, you can't pick another project as a parent.
In a way, that's deliberate. The select box was the old behaviour. We introduced the dynamic box because to get several different item types was going to require more space, and more information - it's useful to know whether you're selecting a project or a goal.
line 122 should be:
$values['ptypefilterquery']=' AND '.sqlparts('typeinlist', array('types'=>implode('',$ptypes)));
Thanks, I'll give that a spin, see how it looks.