Unfortunately, you need to heavily modify the output of my hack to achieve this.
Fortunately, I have this here.
1. Install this mod (if you have not already). Once installed, just copy these files (attached) into that folder.
modules/mod_vm_cat_menu_specific
This is not 100%, as it only supports 2 levels (as you see on rugged); Top and 1 sub, only categories. And it doesn't have a lot of other options I have added to the latest revs.
The reason for modification, is Yootheme dropdowns use separator as the top "links" with sub categories. This is why they are not linkable, only show dropdown when clicked.
[attachment cleanup by admin]