@vapvarun, Varun, sorry to be a pain but still no luck adding the file you recommended to the php.ini file. The large logo will display, but the small (80×80) logo creates the issues with things appearing behind the titlebar.
Also, I can’t get the logo to show on login page. If you hover over where the logo should be, it does indicate a hyperlink–but it just won’t appear. I contacted the host (BlueHost) and they stated that allow_url_fopen = on is enabled. I have deployed it on two other sights with no problems. It is just on this one site. I have been turning off plugins to check that possibility, but still no luck. Most of the other sites have the same plugins.
It is still the same issue I described in my initial post; the BuddyPanel raises up into the logo area and the search button has white padding around it when the BuddyPanel is expanded (see the attached screen shot with red markings).