I have the same issue. Basically, i have the groupItem nested in the second level of the menu, and I set the cssclass to "custom", where the "custom" cssclass defined to show an arrow image at the right side of the link. However, the arrow is not showing in the menuitem where it suppose to show.
groupItem.CssClass = "custom";
.RadMenu_Default .custom .link .expandRight
background: transparent url('../../../../App_Themes/css/expand.gif') no-repeat right center;