UPDATE
I have reverted back to Jquery 1.3.2 and everything is working, not sure what the problem is/was as I have not changed anything else apart of t
I was having the same problem, and I found that in my case the cause was the datepicker div for some reason is retaining the class .ui-helper-hidden-accessible, which has the following CSS:
.ui-helper-hidden-accessible {
position: absolute !important;
clip: rect(1px 1px 1px 1px);
clip: rect(1px,1px,1px,1px);
}
I'm using the google CDN hosted versions of jquery, so I couldn't modify the code or the CSS. I had also tried changing the z-index without any success. The solution that worked for me was to set the clip property for the datepicker back to its default value, auto:
$('.date').datepicker();
$('#ui-datepicker-div').css('clip', 'auto');
Since this specifically targets the datepicker div, there's less of a chance of unintended side effects on other widgets than changing the ui-helper-hidden-accessible class as a whole.