I think you may be on to something here. How many modules are listed in the drop down list?
I have seen many times where a half installed DNN only displays 5 modules and many other things are broken. It is usually caused by the other way around, copying the files from an existing DNN site where the installation routine has not properly installed the modules on the new machine.
One workaround for this issue is to copy the files in install\modules (from a fresh DNN install package)to the half baked site and hit the site with http://(server)/DotNetNuke/Install/Install.aspx?mode=Install
Let me explain a little about the installation process and it might explain the situation; During a fresh install from the DNN install package, the application takes each zip file in Install/Module and unzips the contents into \DesktopModules and runs the approriate database scripts. This allows the modules to be registered under DNN for the code part while the scripts provide the database part. The original file is then deleted from from the Install/Module folder.
This works fine for development purposes, but when you attempt to copy your existing site to new machine, the new application will have no knowledge of any modules because the Install\Module folder is emtpy (already installed).
The best way is to install DotNetNuke normally from the Install package onto the new machine to get a completely working version of DotNetNuke. Then you can do you your development locally, and either publish or copy your files OVER the working version on the new machine.
It makes sense once you understand how the DNN installation actually works.
I hope this is of some help to you. Please let me know your results.