“Folding” links in the blogroll

there is a plugin called “better blogroll”
I guess it would help you do what you want .
I had it installed on one of my sites, but site currently down , so can’t really test – but as far as i remember it does the work u asking for

http://www.dyers.org/blog/better-blogroll-widget-for-wordpress/

give it a look anyway and when my site is back up , i will re-confirm this

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