Using MOODLE_18_STABLE, from 9/14/07.

If there are groups defined in a course, and the course-level groups mode is set to 'no', the gradebook will only display users that are in the first group (groupid 1). The course group mode must be set to 'separate' or 'visible' in order to see all participants in the gradebook.

It looks like in get_formatted_grades(), it ignores the course groupmode setting and calls get_current_group(), which gets the current group from $SESSION->currentgroup[$courseid] . This seems to be getting set to 1 somewhere along the way. If the course group mode is 'no', it should just default to showing all participants.

Here's a fix -

diff -r1.3.2.8 lib.php
396,399c396,400
< // if the user has selected a group to view by get the group members
< if ($currentgroup = get_current_group($course->id))

{ < $groupmembers = get_group_users($currentgroup); < }

—
>
> // if the user has selected a group to view by, and the course group mode is not 0, get the group members
> if ($currentgroup = get_current_group($course->id) && groupmode($course) != 0)

{ > $groupmembers = get_group_users($currentgroup); > }