Your Money 2004 Payee list is at Accounts&Bills->Categories&Payees->Payees. Note there is a list and a date telling you when the Payee was last used.
I am thinking maybe only those Payees you have used with in the last year show up on the drop-down list. See if that corresponds with your list. I don't know how you might change that time-out if that is the case.
If you want some tips on consolodating Payees, that can be done.