Dynamic Persistent Menu problem / module alternatives
Yes, as you mention, their is a conflict between the Dynamic Persistent Menu and Special Menu Items modules.

Dynamic Persistent Menu adds a CSS class (.dynamic-persistent-menu-menu-item) to all &lt;li> elements of a menu that is overridden by Special Menu Items.

This bug comes from the special_menu_items.module file, line 64. You can remove the following code:

$element['#attributes']['class'][] = 'nolink';
$element['#attributes']['class'][] = 'separator';


EDIT: The main bugs come from Dynamic Persistent Menu. As you know, the class attribute passed to theme_menu_link() should be an array, but in Dynamic Persistent Menu a string is passed. 

So your WSOD (blank page) comes from theme_dynamic_persistent_menu_menu_item() in Dynamic Persistent Menu, where a string is passed instead of array.

When Special Menu Items tries to override it, a fatal error is presented.