formatting of sidebar abruptly changed

Apologies for the lengthy post: My site (www.rishishukla.com/blog -- using WP 2.8.1 / Atahualpa 3.4.1 / hosted at 1and1.com) was loading slowly in IE8 this morning (first time this has happened to me...the site is still under construction so it isn't overly bulky). I tried to install the wp-cache plug-in (installed it and entered my API; did not see any options to "deactivate compression" under miscellaneous options, as described in the installation instructions) to speed things up and then clicked on a link in my dashboard to update the Akismet plugin from version 2.2.4 to version 2.2.5. When I returned to my dashboard, the "Plugin" feed and "Other WordPress News" feed were no longer working... I then previewed my site to find that any content placed in the upper right hand portion of my site gets underlined upon rollover (I tried moving / replacing the text widget, but anything that ends of in the top right gets underlined or reformatted). I tried to deactivate and then delete the wp-cache plug-in (this did not resolve the problem). I then deactivated and then deleted the Akismet plugin (this corrected the "Plugin" /"WordPress News" feed issue, but the formatting issue at the top of the right sidebar did not get fixed).

I tried the following potential fixes: (1) uploaded an .htaccess file in order to use PHP5 -- I had to do this in order to get "reinstall automatically" to work...once I uploaded .htaccess, I did an automatic re-install of WP 2.8.1. This did not resolve the sidebar formatting issue. (2) I uploaded Atahualpa 3.4.2 to themes. My site still had the formatting error, even with this version. I currently have version 3.4.1 up.

To recap, the site was working fine last night. This morning it was a little slow on initial load but faster on subsequent loads. I tried to install wp-cache and then clicked on the upgrade Akismet option in dashboard --> this caused the Plugin and WordPress NEws feeds to disappear and the formatting at the top of my right sidebar to become corrupt (any content that ends up at the top right inherits this formatting issue).

I could really use some help with this one! Thanks in advance.

---

The strangest thing just happened...I accidentally deleted text widget containing the icons from the top right of my site. When I hit "preview" everything on the right moved up, but the formatting was corrected! I recreated the text widget and inserted it to test things out - eveything seems like it's back to normal at the moment. I am cautiously optimistic - is there anything else I should be looking out for? Does my site look overly bulky? If I try to install wp-cache again, is there anything particular I need to do? Thanks a lot!