try changing
if ( $selected == $option['value'] ) // Make default first in list
$p = "\n\t<option style=\"padding-right: 10px;\" selected='selected' value='" . esc_attr( $option['value'] ) . "'>$label</option>";
to
if ( $selected == $option['value'] ) // Make default first in list
$p .= "\n\t<option style=\"padding-right: 10px;\" selected='selected' value='" . esc_attr( $option['value'] ) . "'>$label</option>";