ul.nav {
    list-style: none;
    display: block;
    width: 200px;
    position: relative;
    top: 10px;
    left: 300px;
    padding: 10px 0 10px 10px;
    background: url(shad2.png) no-repeat;
    background-position:right;

}

ul.nav li a
{
    -moz-transition: all 0.3s ease-out;
    -o-transition: all 0.3s ease-out;
    -webkit-transition: all 0.3s ease-out;
    background: #005A9C url(border.png) no-repeat;
    background-position: right;
    color: #FFFFFF;
    padding: 7px 15px 7px 20px;
    border-top-left-radius: 10px;
    border-bottom-left-radius: 10px;
    -webkit-border-top-right-radius: 10px;
    -webkit-border-bottom-right-radius: 10px;
    width: 100px;
    display: block;
    text-decoration: none;
    -webkit-box-shadow: 2px 2px 4px #888;
    box-shadow: 2px 2px 4px #888;
}


ul.nav li a:hover
{
    background: #ebebeb url(border.png) no-repeat;
    color: #005A9C;
    padding: 7px 15px 7px 30px;
}

ul.nav li a {
    ...
    padding: 7px 15px 7px 30px;
}

ul.nav li a:hover {
    ...
    padding: 7px 35px 7px 20px;
    position:relative;
    left:-20px;