Well, even though you performed a cutout at 8 levels, doesn't mean that there is only 8 colors in the image, which is why you are having so much trouble with the select-color.
The only way i have ever been able to do color separations like you are talking about is to convert your image to indexed color, select the number of colors (8 doesn't generally produce great images, so i would go with 16). Uncheck 'transparency' select forced - none, and choose whatever type of dither looks best for the image (on the bird i selected none).
Now if you go to image - mode - color table you have a pallette of the colors in your image, which you can save and then load them into your swatches pallette and use the select-color range tool to get your selections, then copy and paste those selections to a new - RGB image.
There may be better ways to do it (god i hope there are) but i dont know them.
