Hi Picasa,
The problem is that in your list you’ve added h2 tag inside li . And all the padding margin of h2 tag is taken carried over there to make it look messy. Although not invalid, using h2 tag inside li tag is not a very good practice.
So I suggest to remove the h2 tag from there then you can increase the font size of the anchor list using the following simple CSS.
#dr_list_categories a {
font-size: 1.3em;
}