Have you tried the 3v3 ladder? It should be the same thing, so I am curious to whether it works there or not.
Also follow this link: https://www.warlight.net/Unlockables
^Make sure that the ladder shows as unlocked. (It is close to the bottom)
EDIT: Just read this part "I can see other people in the dropdown list." hmm. Try to unfriend him, then refriend him again. Oh and make sure neither of you is on the other guys Blacklist.
Edited 9/30/2015 18:25:43