It definitely sounds like Yahoo! is not handling your buddy list correctly on their servers. Unfortunetly your options in getting it fixed are somewhat limited…

1. Rearrange your buddy list. Open Messenger and click on the “Contacts” menu. Click on “Manage Groups” and then select “Create New Group”. Move all of your buddies into that group then delete all of the old ones. Sign off and sign back on. If after signing on you see more than the one new group you just created that is one potential source of the problem.

2. Contact Yahoo! directly. Include a list of everyone that actually appears on your buddy list and a separate list of buddies that appear in the ignore list. If the lists are different when using other Messenger clients you might also want to include a list of differences.

3. Find someone knowledgeable in how Yahoo! Messenger processes the buddy list and let them have a whack at it. If it is someone you personally do not know do not give them access to your account or other personal information. At the very least they will be able to give you additional information on how to go about getting it fixed.