We tried over a span of an hour to queue with 5 people but it would not let us as it stated it could not find anyone to match with. I find this a bit odd given the player count. I think it's a bug.
Definitely an issue right now and happened to us last night, sucks. The root cause seems to be that Party Matchmaking tries to match parties with parties when the skill gap warning is active, and since a solo queuer is not a party, it can't make a match.
This is a design decision Valve has made, and it absolutely sucks. I play with a large group of friends, and we're often a 6 stack. But it means as soon as one person calls it a night you have to wait to either get someone to replace them or argue about who is going to drop off with them.