Category Widget – Drop down option- moved blog

I’m quite new to using WordPress so apologies in advance…

I use the categories widget in the sidebar to list my tags.
I’ve moved the blog url from the installed folder to the root folder
ie. to shiawase.co.uk (Blog address)
from shiawase.co.uk/wordpress (WordPress address)
making the appropriate changes in options.

The category widget works ok when it’s a list
returning a correct url
shiawase.co.uk/categoryname
when it’s a dropdown it returns
shiawase.co.uk/wordpress/?cat=8 (or whatever the category ID is)
and my server gives a
“Forbidden — You don’t have permission to access /wordpress/ on this server”
error message.

If I edit the url in my browsers address bar to
shiawase.co.uk/?cat=8
it works

I’ve found the code in widgets.php
line 595 onwards

<script lang='javascript'><!--
    var dropdown = document.getElementById("cat");
    function onCatChange() {
		if ( dropdown.options[dropdown.selectedIndex].value > 0 ) {
	        location.href = "<?php echo get_option('siteurl'); ?>/?cat="+dropdown.options[dropdown.selectedIndex].value;		}
    }
    dropdown.onchange = onCatChange;
--></script>

But now I’m at a loss. Why isn’t it generating the correct url? Everything else on my site seems to be working.
I don’t want to, but can I “hard code” the correct format into this file?
or
Where is it getting the option from? (get_option ('siteurl')
is it getting the “WordPress address” rather than the “Blog address” ?

Any ideas/ help?