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The answer is to use another DVD Authoring program. There are no sub menus available in Premiere Elements. This has been a long standing problem and most have went to Sony DVD Architect for their authoring software.
Check out Steve's tip on menu markers and see if there is something you might have missed. But I really think that you won't be able to do what you are trying to do, at least not in Premiere Elements.
More help available at http://muvipix.com also, stop by and say hi :)
Robert came up with a solution using PGCEdit to modify the DVD burnt to folder... if only I could find it.
Or you could try this work around:
Very good Paul, here it is