Did you try searching for account names using wildcards (e.g. * in front and at the back of the - optionally partial - account name)? In the User Selection Dialog and after entering your seach term, did you click the magnifying glass? Did you use the QMC->Users tab to search for users and permissions?

Please post a screenshot of QMC->System->Setup->Directory Service Connectors->Select your DSC->Local Directory. Thanks.

Peter