I had the same issue and fold this solution
I looked at my file /httpdocs/app/code/core/Mage/Adminhtml/Block/System/Config
and matched it with original version
I was missing this line 463
here's a bigger chunk of the code to see full view the bolded area was missing from my file. I added it from original and it fixed it.
if ($method) {
if ($fieldType == 'multiselect') {
$optionArray = $sourceModel->$method();
} else {
$optionArray = array();
foreach ($sourceModel->$method() as $value => $label) {
$optionArray[] = array('label' => $label, 'value' => $value);
}
}
}
else {
$optionArray = $sourceModel->toOptionArray($fieldType == 'multiselect');
}
$field->setValues($optionArray);
}
}
}
return $this;
}