When “Combine Shipping Methods” is checked the cart will fill the dropdown list of shipping methods on the cart screen with the regular shipping methods selected in the cart settings (UPS, USPS, FedEx or Canada Post) and the custom shipping method(s) defined in the custom shipping methods setup screen. The custom ship methods will appear as the last item(s) in the list of shipping methods. Can you confirm that you are running SC 2.9 and not 3.9.
-Scott