Hi David,
Grouping the drop targets works fine. I think you are going wrong in setting up the Drag and drop settings. Also check the Correct Answers dialog box.It should be in sync with the matching of source and targets on slide.Sometimes deleting some source or targets, or Changing the matching may cause an issue.You need to open correct ans palette and delete the rows which have warning message(yellow icon).
Can i look your Drag and Drop settings in Drag and drop panel.? Can you please share your cptx file(interaction slide) or post the snap shot of your drag and drop settings.?
You can share your cptx file at( dgp at adobe dot com.)
Devraj