Here is a possible solution I found via another link in this forum:
"I had exact problem and read a forum answer to go reset the outlook navigation pane. They said to go to Start => Search Programs and Files input area in Windows 7, and type in outlook.exe/resetnavpane BUT this didn't work for me. However when I just typed in outlook.exe, it found an outlook file in the search window and I clicked on that. Once I clicked on that, my subfolders appeared again!! Wheh!"