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I guess this thread is a couple weeks old, but I didn't see it mentioned:
If the problem is still unresolved, you should check that you don't have the "Auto-Pass on Loot" option selected.
While in a group (or maybe you have to be in an instance), if you right click your unit frame, just above the Dungeon Difficulty and Raid Difficulty items in the menu, there is an option to Auto-Pass on loot. If this is set to Yes, perhaps due to a misclick some time in the past, it would obviously explain the OP's problem.
I haven't found a way to control this setting other than the unit frame pop-up menu, but there might be one, somewhere.
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