Hi Martyn, from your posting it is not easy to determine how experienced you are with Dreamweaver, so apologies up front if you know all this stuff already.
From the way you have described what you are doing my interpretation is that you are not using Layers in the manner that they are designed to be used. If you put a Navigation Bar inside a Layer (which is correct) then the properties of the Navigation Bar are independent to those of the Layer. If the Layer is "Show" then the Navigation Bar will be visible but the way in which the Navigation Bar works is determined by the code imbedded within the Bar and not by the Layer. Conversely if the Layer is set to "Hide" the Navigation Bar will be invisible.
If you want to control the behaviour of a Navigation Bar through the Layer functionality then you must set each Navigation item within its own layer - but this is just not practical in the normal way of site layout.
If you have a URL to the site then I will take an look and see if I can offer a more helpful solution.