Rails - May 2010 - observe_field not working on dependeng collection_select

Setup:

I have 3 drop downs generated by collection_select, where in the next
drop down''s option values are dependent on which option value was
selected in the previous drop down. This is done using observe_field.

e.g.
country => state => city

Here''s the code:
%div
  .label
    Grading Scheme Select - Tier 1
  = collection_select (:grading_scheme, :id, GradingScheme.all, :id,
:name)
  = observe_field(''grading_scheme_id'', :update =>
''parent_div'',
:frequency => 0.5, :url => {:controller =>
''grading_schemes'', :action =>
''filter_parents''}, :with =>
''grading_scheme_id'')
%div
  .label
    Tier 2
  #parent_div
    = collection_select (:grade_layer, :id, @parents, :id, :name)
    = observe_field(''grade_layer_id'', :update =>
''child_div'', :frequency
=> 0.5, :url => {:controller => ''grading_schemes'',
:action =>
''filter_children''}, :with => ''id'')
%div
  .label
    Tier 3
  #child_div
    = collection_select (:grade_layer, :id, @children, :id, :name)

Initially the observe_field would work on updating child_div (Tier
3)whenever I select a different item in Tier 2. If I select a grading
scheme in Tier 1, Tier 2 will update its list. However if i select a new
item in that updated list in Tier 2, Tier 3 will not update.

I''ve checked my local server, and during those occassions that Tier 3
doesn''t update i find that ajax isn''t producing any calls. I
hope
someone can help me out on this.
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