I just found this thread after experiencing the same thing flying online last night. Unsure what the actual weather settings were, but the METAR in the briefing said scattered clouds at 900', and those clouds were full of rain, so definitely CASE III conditions. If the carrier happened to be in one of those clouds, you just couldn't see it at all, but on the Inbound call it would still report visibility 10SM, CASE I expected. At one point I flew right past it at 800' trying to attempt a recovery despite the conditions, and still couldn't see it. Ended up having to just loiter until it got to a patch of clear sky large enough to fly an approach in.