I have also noticed that a select has to have a parent besides form or body to validate in html strict.
The error tells you some of the parent nodes that can contain the select-
they are all block level elements- headings, div, p and so on.
If you wrap a div or a p around everything in the form it should validate strict html.
I have been using at least one fieldset element for forms,
and containing all the controls in fieldsets.
Kind of like tbodies containing their rows.
This example validates with the fieldset, or with a p or div in its place, but returns the same error that you got if the select is directly decended from the body or a form.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01//EN" "http://www.w3.org/TR/html4/strict.dtd">
<html lang="en">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=utf-8" >
<title>Valid select</title>
</head>
<body>
<p id="p_opts"><a href="../webshop.html">Home</a></p>
<h1>HTML Form Elements</h1>
<h2>Select</h2>
<form action=''>
<fieldset>
<legend>A single select in a form</legend>
<select name="select_1">
<optgroup label="First optgroup">
<option selected="selected" value="option">Select element</option>
<option value="2">Option 2</option>
<option value="3">Option 3</option>
</optgroup>
<optgroup label="Second optgroup">
<option value="3">Option 5</option>
<option value="2">Option 6</option>
</optgroup>
</select>
</fieldset>
</form>
</body>
</html>
I don't find documentation for this, and I don't know if the validator is actually correct for html or xhtml in this case. But if you need it validated,
give the select a parent.