Existing nodes doesn't show up in Parent selector when converting an existing content type to a 'group node'

I am not able to reproduce the behavior that you are describing. I have installed a fresh copy of D6.22 with the latest OG, Views, OG_Subgroups and Devel modules.
- I created two groups, Location and Project.
- I then used Devel to generate 10 Location nodes.
- On the OG Subgroup settings page I enabled subgroups for the Location content type only.

In your first case you said that Location nodes were not showing up in the parent selector. In my test case they were.

- Next I enabled subgroups for the Project content type.

Now when I create either a location or project, both node types show up in the parent selector. Whereas your location nodes where not showing up.

So...You'll need to make sure that both project and location content types are selected on the OG Subgroups settings page in order for them to show up in the parent selector. Double check that the content types have the "Group Node" selected on the content type settings page, (although I'm sure it is). Make sure your location groups are not 'private'. You also may want to try and use User 1, maybe it a permission thing.

I think something isn't quite right with your location nodes, maybe try setting up a sandbox site and re-create your use case on a fresh install and new nodes. Just to try and identify if its a problem with the module or your content type.

Lastly, each group is run through a masking function to make sure the current user can view it. Maybe the groups are being stripped out due to some condition. In order to eliminate the masking function as the culprit, make sure your user has 'administer nodes' permission. Pasted below is the masking function, its well documented.

/**
 * Mask a group title based on og privacy and node status
 * 
 * If the group is unpublished, and the current user can't view it,
 * the title will be changed to <Hidden>.
 * 
 * If the group is private, and the current user is not a member,
 * the title will be changed to <Private>
 * 
 * If $member is TRUE, and the current user is not a member, regardless
 * of privacy options, the title will be changed to <Private>
 * 
 * @param &$group
 *   The group object
 * @param $member
 *   If TRUE, the user must be a member of the group in order to not
 *   have it masked, otherwise the user only has to be a member if the
 *   group is private
 * @return
 *   TRUE if the group title was masked, otherwise FALSE
 */
function og_subgroups_mask_group(&$group, $member = FALSE) {
  $title = '';
  
  // If the user can administer nodes, no access checking needed
  if (!user_access('administer nodes')) {
    // If the group is unpublished, or the user can't view content, hide it
    if (!$group->status || !user_access('access content')) {
      $title = '&lt;' . t('Hidden') . '&gt;';
    }
    // If the group is private and/or we are checking for membership
    else if ($group->og_private || $member) {
      // If the user is not a member, hide it
      if (!og_is_group_member($group->nid)) {
        $title = '&lt;' . t('Private') . '&gt;';
      }
    }
  }
  
  // See if we've specified a new title
  if ($title) {
    $group->title = $title;
    return TRUE;
  }
  
  return FALSE;
}

I'm wondering if this is a caching issue. The list of parents are retrieved from a cached copy of the subgroup hierarchy. The hierarchy cache is cleared when a group is created, updated or deleted so in your case the cache *should* be cleared when the conversation node is converted to a group.

Try clearing Drupal's cache at admin/settings/performance. In the mean time I'll try reproducing the behavior you're mentioning.

Its not a cache issue, I was able to recreate the problem you are having. Here is my summary of how to recreate it:
1. create a new node type, lets call it 'Test Group'. DO NOT make it a group node yet and do not adjust any Subgroup settings.
2. create two or more standard nodes from Test Group. Call them Pre Test 1, Pre Test 2, ...
3. Now edit the Test Group content type and make it a Group Node.
4. go to Create Content->Test Group and create another Test Group node and call it Post Test 1.
5. go to admin/og/subgroups and enable subgroups for Test Group.
6. go to Create Content->Test Group and look at the parent field, only the Post Test node shows up. The Pre Test nodes are missing.

This isn't an issue related to the Subgroups module, this is something that OG should handle when converting an existing content type into a group node. I imagine OG doesn't update existing content due to group privacy settings.

The trouble is that there is no record in the OG database table for the existing nodes (the pre test nodes). The easiest solution is to go to admin/content/node and filter by the content type having the issue. Select all nodes and run the Publish bulk operation. This will cause each node to be resaved and OG will then add a record in the OG table. Then all of the "pre test" nodes will show up in the Parent selector.