Total hax, but this is better than the user menu completely not working.

public/javascripts/widgets/user-dropdown.js

@@ -17,6 +17,10 @@
       evt.stopPropagation();
 
       self.menuElement.toggleClass("active");
+
+      if ( $.browser.msie ) {
+        $('header').toggleClass('ie-user-menu-active');
+      }
     };
 
     this.hideDropdown = function() {
@@ -27,4 +31,4 @@
   };
 
   Diaspora.Widgets.UserDropdown = UserDropdown;
-})();
+})();

public/stylesheets/sass/application.sass

@@ -263,6 +263,9 @@ header
       :top 5px
       :display block
 
+header.ie-user-menu-active
+  :height 150px
+
 //////////////////////////////////
 ul.dropdown
   :padding 0