I don't normally use KDE, but I logged in to see if I could find a fix for this. First, I right-clicked on the icon for the Kmenu and selected "Remove K menu menu." Naturally enough it disappeared.
Then I right-clicked on a blank section of the panel, and I got a menu. The top item was "Add applet to panel." I selected that. Then I got a dialog box which presented me with a list I could scroll through. The 11th item down was "K Menu." I selected that,clicked to button at the bottom of the box which said "Add to Panel" and it added the K Menu to the panel. Then I had to right click on the icon for the K Menu to get another menu which let me move it to where I wanted it (all the way to the left).
I'm using VL 5.9 Standard with KDE 3.5.8 installed, so you're system may be different.
I hope this helps.