That's interesting...
What shows at the bottom of the drop down isn't blank,
what shows in the formula bar is the single quote
doing a len() calculation of the cell gives zero
and running this little code I use to see what's actually in a cell returns nothing
Code:
Sub CheckOfCharacters()
Dim i As Integer
Dim str As String
str = ActiveCell.Value
For i = 1 To Len(str)
Debug.Print Mid(str, i, 1) & " = " & Asc(Mid(str, i, 1))
Next
End Sub
I guess the work around would be to put your list into a column somewhere and in the validation for the list specify the range plus the cell on the next row which would be empty.