OK ... I've dug into this and I've hit the jackpot ... Oracle and PG *both* fail, but in different ways and for different reasons ...
1. The Oracle version inserts the new group but it doesn't show up in the "group element map" view and views built on it, which means you can't see it from the UI (this may explain Jun's impression that the UI is broken and that you need to check the underlying tables themselves).
2. Dave's diagnosed the PG version correctly ... there's a tree query that looks like it might've gotten inverted when it was ported to PG. This is easy to do using our tree keys, though there are now some easy ways to find parent nodes. I need to look at the original Oracle query, too, I think it might be more complex than is required but until I fix #1 I'll leave that.
I won't be fixing these problems immediately but will try to do so in the next couple of days.