I've had a hard time in the past with rules & conditions that are triggered by a field that is using a multi select - that is, it seems that there are some bugs specific to that control, because if I drag the same repeating field onto the form & make it a little repeating table w/ a text field, I don't have the same issue.
However - I'm having a little trouble sorting through your description - any chance you can attach your form to a reply under the Options tab?