I've found that the Group Finder tool cannot assign the group to a dungeon if it can't tell what level another player is. This happens if you're in a cross-Alliance group and one of your party does something to trigger a loading screen. At that point, LFG believes the player to be level 0. Proof:
See how every dungeon in the game was blocked? This despite the group being 2 x v16s plus 1 x v13. We couldn't even get into normal Fungal Grotto because the LFG thought my friend in AD was level 0!
I believe that once the LFG tool "caught up" with my friend's true level, it would have allowed us into a random dungeon... but we couldn't be bothered to wait past 8 minutes.
Guildmaster of the UESP Guild on the North American PC/Mac Server 2200+ CP & also found on the European PC/Mac Server 1700+ CP
These characters are on both servers:
Alix de Feu - Breton Templar Healer level 50
Brings-His-Own-Forest - Argonian Warden Healer level 50
Hrodulf Bearpaw - Nord Warden Bear Friend & identical twin of Bjornolfr level 50
Jadisa al-Belkarth - Redguard Arcanist looking for a role