I'm currently level 42 hardcore, and on Quest 3 (City of Blood) in Act 2 of Nightmare. For some reason, when I go to join a public game Quest 8 was also showing as available but Quest 4 was not (I could join Quest 1-3 or Quest 8). However, whenever I clicked on join public game, it would search for one, find none, and then jam on the 'Creating a Public Game' dialog box. I was able to get out of the jam simply by clicking on that box (which sits directly over the Switch Hero button), as that brought me to the hero selection screen. i.e. It was as though the game creation had failed, but the dialog box just never went away.

I was trying to test what would cause this, and created a Normal game in Act 2 on Quest 7. After leaving that game, and going back to create a public game, I now show Quests 4-8 all in my public game selection screen. However, all of them were grayed out, except for Quest 7, which was available and showed one other player on that quest. Clicking join public game actually allowed me to join that persons game too, effectively allowing me to skip Quest 4-6 in Act 2 Nightmare.

Edit: I went back to the quest selection screen and chose Quest 10 from Act 2 Normal, and now my quest selection screen is back to allowing me to select up to Quest 3 (though 4-8 are grayed out). I then tried the same thing with Quest 6 (join it on normal, then go back to public games) and sure enough Quest 6 is now available in my public games on Nightmare even though I haven't progressed that far. Testing it out more thoroughly, it seems to work for every quest from 4-8 in Act 2, but nothing beyond. I'm not sure if this is the limitation of the bug, or a limitation oif my level (I might not be a high enough level to see public quests beyond quest 8 in Act 2).
Edited by Kalaghan#6838 on 5/21/2012 9:59 AM PDT