In the past, I've gone and renamed the list back to its original name (i.e. LIST 2), selected the list and did the 'Clear all' (or similarly named) button and then did a reset of the machine (usually a slow pull of the smart card, wait for and error message, and then slowly push it back in). This will hard reboot the box and it seems to fix the favorites list. It might also work with just holding down the power button for 5 or so seconds to reset it, but not sure.
Similarly, I have to do this process when I create a new list too in order to get the channels to display correctly in the guide (save the OTA HD channels, which I still can't get to display in the guide).