I am having trouble setting custom permissions on a Item in a custom list. Whenever I select "Shared With" on an item, SP does not give me the ADVANCED option, so I can break inheritance on the Item.  I just have this message:

"There are more people than we can show here. If you are an administrator, you can see all of them on the advanced permissions page."

But no ADVANCED button. 

I am the Farm Admin, Site Coll Admin, and am in the Sites Owners group.  Any help would be appreciated.

Hi Stan- it's a bug. Check the following link for the solution:

http://sharepoint.stackexchange.com/questions/127802/unable-to-manage-item-level-permissions