Problem with relative layer

The site is http://www.evocreative.com/easternbabes/
I have set the layer #nav to relative positioning and placed mark up <div id="nav"></div> right after the main content div. I wanted it to render relative to the top left corner of this div. I can't understand why it is rendering above it. Anyone know what I am doing wrong? Obviously I am not understanding something pretty basic.

CSS:
body {
margin-left: 0px;
margin-top: 0px;
margin-right: 0px;
margin-bottom: 0px;
}

#wrapper {
font-family: Arial, Helvetica, sans-serif;
width: 800px;
margin-top: 0px;
margin-right: auto;
margin-bottom: 0px;
margin-left: auto;
}
#content {
font-family: Arial, Helvetica, sans-serif;
margin: 0px;
padding: 0px;
height: auto;
width: 800px;
}
#top {
margin: 0px;
height: 265px;
width: 100%;
}
#top #header {
height: 64px;
border-top-color: #D30D0F;
border-bottom-color: #D30D0F;
border-top-style: solid;
border-bottom-style: solid;
border-bottom-width: 2px;
border-top-width: 2px;
background-image: url(images/logo.jpg);
}
#tagline {
background-color: #D30D0F;
float: left;
height: 36px;
width: 600px;
border-top-width: 1px;
border-top-style: solid;
border-top-color: #FFFFFF;
padding-left: 200px;
}
#bottom {
margin: 0px;
padding: 0px;
float: left;
height: auto;
width: 100%;
}
#bottom #left {
float: left;
height: auto;
width: 183px;
padding-left: 11px;
}
#bottom #right {
width: 606px;
margin-left: 194px;
}
#right #topbabes {
float: left;
height: 260px;
width: 95%;
padding-top: 11px;
padding-left: 25px;
}
.bigbabes {
float: left;
height: auto;
width: auto;
margin-right: 45px;
}
.bigbabename {
font-family: Arial, Helvetica, sans-serif;
font-size: 10pt;
font-weight: bold;
color: #8A8C8D;
text-align: center;
padding-top: 5px;
}
.bigbabesright {

float: left;
height: auto;
width: auto;
margin-right: 0px;
}
#homethumbs {
background-color: #F2F2F2;
float: left;
height: 235px;
width: 575px;
padding-left: 25px;
}
.homethumb img {
border: 1px solid #CE0C0C;
}
#homethumbs .homethumb {
float: left;
width: 50px;
margin-right: 33px;
margin-top: 10px;
}
.thumbtext {
font-family: Arial, Helvetica, sans-serif;
font-size: 8pt;
font-weight: bold;
color: #666666;
text-align: center;`
padding-top: 5px;
line-height: 9pt;
}
#homethumbs .homethumblast {
float: left;
width: 50px;
margin-top: 10px;
}
#signup {
font-family: Arial, Helvetica, sans-serif;
font-size: 10px;
font-weight: bold;
color: #D30D0F;
background-color: #E3E3E3;
height: 170px;
width: 167px;
}
#nav {
left:5px;
width:178px;
height:335px;
z-index:1;
background-image: url(images/nav_back.png);
background-repeat: no-repeat;
position: relative;
}

 

Use the outline tool in Firefox's web developer extension. You will see the #nav is exactly where you put it, at the top of the #content element and shifted 5px to the right of its natural position.

See http://www.w3.org/TR/CSS21/visuren.html#propdef-position

cheers,

gary