Maybe the problem was the group leader being level 16. According to Dungeon Finder it lists 17 as the minimum for EH. Try with the level 18 as GL, may fix it.
I just ran through Raz's Wheel and the level worked properly this time. We were all vets. Everyone was a V5 except for me, I am a V14. One of the V5's grouped us and the dungeon was level 5.
Hey there @Greywolf46,
Did you happen to have the dungeon difficulty set to Veteran? This can be checked on the Group menu.