It looks like you don't have the 3.6.7 PATCHES applied Here are the links.
- PATCH 367-01: Odd effects when 'CSS: Compress' = 'Yes'
- PATCH 367-02 is incorporated in PATCH 367-04
- PATCH 367-03: PHP errors when adding widget areas in index.php
- PATCH 367-04: Hovering over a Post/Page title only shows "Permanent Link to"
- PATCH 367-05: Site Title appended after the 'WordPress SEO by Yoast' title
It seems to be the default, because I took the widget out and custom widget was still there.
when you took it out of where? be specific. If you took it out of the left sidebar, indicate that.
if you go to ato->Add new WIDGET AREAS do any check boxes show in the 'Delete custom Widget Areas' area?