Nothing archaic about the layer prefixes. They are the way Encore menus work. And you should not have a problem simply getting the logo to appear as a highlight.
HOWEVER, a highlight is limited to 2 bit color, and it will look lousy, unless you create a graphically simple version.
I assume part of your problem is that the image of the logo you are using is not 2 bit color or does not have an alpha channel or is otherwise not transparent. If you can upload the menu and send the link (by private message or send your email by private message), I'll take a look.
The workaround for this is to use autoactivate to go to a different menu that has the correct state for the select button with the logo in the background of the button. You create multiple menus.
Note that mouseover won't autoactivate, so doesn't work on a computer the way I suspect you'd like.
The probable deal breaker is that you can't then add the clicked state unless you attempt a transition.