dynamic fields are not retaining values on form validate (refresh)

Question

I have dependent select list (dynamic dropdown) in my form. When I change a value of the first select list, the second select list is automatically pouplated using ajax callback. Both select fields are required! All works fine, except validation.

There are 3 scenarios when submiting form:

1. If I do not change any values of my select lists (leaving default "- select -"), and just click submit button; page refreshes and displays message about required fields - This is working fine!
2. If I set values in both lists, click submit, validation passes, form is saved - This is working fine as well!
3. If I set value of just one select list and click submit button: BOOM! - All options from that select list are gone.

If I do dsm($form_state['values']) in validate function I can see that all values are set correctly.

Below is my code:

function custom_form_alter(&$form, &$form_state, $form_id) {

    if ($form_id == 'registration_form' && $form['#bundle'] == 'free_registration_volunteer_call') {        

            $options_first = custom_first_dropdown_options();
            $value_field_event_1 = isset($form_state['values']['field_event_1']) ? $form_state['values']['field_event_1']['und'][0]['value'] : key($options_first);

            // Setup field_event_1 select and bind ajax
            $form['field_event_1']['und']['#options'] = $options_first;
            $form['field_event_1']['und']['#default_value'] = $value_field_event_1;
            $form['field_event_1']['und']['#ajax'] = array(
                    'event' => 'change',
                    'callback' => 'custom_ajax_callback',
                    'wrapper' => 'field_event_1_role_replace',
            ); 

            // Setup field_event_1_role select
            $form['field_event_1_role']['und']['#prefix'] = '<div id="field_event_1_role_replace">';
            $form['field_event_1_role']['und']['#suffix'] = '</div>';
            $form['field_event_1_role']['und']['#options'] = custom_second_dropdown_options($value_field_event_1);
            $form['field_event_1_role']['und']['#default_value'] = isset($form_state['values']['field_event_1_role']) ? $form_state['values']['field_event_1_role'] : '';

            $form['#validate'][] = 'custom_form_validate';

    }

}


/**
* Ajax callback for Event roles dropdown
*/
function custom_ajax_callback($form, $form_state) {
    return $form['field_event_1_role'];
}


/**
 * Helper function to populate the first dropdown.
 */
function custom_first_dropdown_options() {
    $node = node_load(arg(1));
    $i = 0;
    if(!empty($node->field_events_for_volunteering['und'])) {
        foreach ($node->field_events_for_volunteering['und'] as $event) {
            if (!$i) $events_list_options['_none'] = '- Select Event -';
            $events_list_options[(string)$event['node']->nid] = $event['node']->title;
            $i++;
        }
        return $events_list_options;
    }
}


/**
 * Helper function to populate the second dropdown.
 */
function custom_second_dropdown_options($key = '') {
    if ($key) {
        $node = node_load($key);
        $i = 0;
        if(!empty($node->field_volunteer_roles['und'])) {
            foreach ($node->field_volunteer_roles['und'] as $role) {
                if (!$i) $role_list_options['_none'] = '- Select Volunteer Role -';
                $role_list_options[(string)$role['value']] = $role['value'];
                $i++;
            }
            return $role_list_options;
        }
    }
    return array();
}


    /**
     * Validate form
     */
function custom_form_validate($form, &$form_state) {
    if (empty($form_state['values']['field_event_1']['und'][0]['value'])) {
        form_set_error('field_event_1', t('Event 1: field is required'));
    } 
    if (empty($form_state['values']['field_event_1_role']['und'][0]['value'])) {
        form_set_error('field_event_1_role', t('Role for event 1: field is required'));
    } 
    if (empty($form_state['values']['field_event_2']['und'][0]['value'])) {
        form_set_error('field_event_2', t('Event 2: field is required'));   
    } 
    if (empty($form_state['values']['field_event_2_role']['und'][0]['value'])) {
        form_set_error('field_event_2_role', t('Role for event 2: field is required'));
    }
    dsm($form_state['values']);
}

submit handler:

/**
* Custom Form Submit Handler (for free registration)
*/
function custom_form_submit(&$form, &$form_state){
    $registration_id = $form_state['build_info']['args'][0]->registration_id;
    entity_registration_custom_confirm_registration($registration_id); //Process registration - Set registration state to 'complete'
    $node = node_load(arg(1)); // Load current node
    $form_state['redirect'] = 'event/registration/success/' . $node->nid; // Redirect to success msg
}

Answer 1

I resolved this finally!

arg(1) returns ajax on ajax request, so I added:

$node_id = arg(1) == 'ajax' ? $form_state['build_info']['args']['0']->entity_id : arg(1);

There was another issue as well. For some strange reason node_load does not return all collections on ajax request. So I had to pull event's title using another node_load call in foreach loop.

This was not working:

/**
 * Helper function to populate the first dropdown.
 */
function custom_first_dropdown_options() {
    $node = node_load(arg(1));
    $i = 0;
    if(!empty($node->field_events_for_volunteering['und'])) {
        foreach ($node->field_events_for_volunteering['und'] as $event) {
            if (!$i) $events_list_options['_none'] = '- Select Event -';
            // $event['node'] is NULL here on ajax request?!?!
            $events_list_options[(string)$event['node']->nid] = $event['node']->title;
            $i++;
        }
        return $events_list_options;
    }
}

So I replaced it with this:

/**
 * Helper function to populate the first dropdown.
 */
function custom_first_dropdown_options($node_id) {
    $node = node_load($node_id);
    $i = 0;
    if(!empty($node->field_events_for_volunteering['und'])) {
        foreach ($node->field_events_for_volunteering['und'] as $event) {
            if (!$i) $events_list_options['_none'] = '- Select Event -';
            $node2 = node_load($event['nid']);
            $events_list_options[(string)$event['nid']] = $node2->title;
            $i++;
        }
        return $events_list_options;
    }
}