Ok sorry I only skimmed your code the first time and didn't fully comprehend what you were trying to do. Undo what I said in my last post.
Your problem is that you've written the fadeIn function to be something called by an event listener, but then you try to call fadeIn here:
You cant do this since you've defined fadeIn to receive an Event object, not a movieclip object. One way to fix it is to change it so that manageMouseOVer only adds/removes the ENTER_FRAME event listener.
With that said...
What you are trying to do would be better accomplished with a tweening engine like GreenSock TweenLite