Haven't had guardian spirit not work before though. I'll have to keep an eye out for that.
Yeah, it happens all the time. You should be using guardian almost only for the increased healing, not to save someone from dying. It's worth noting though that it always procs on yourself, the bug only occurs on other players.
I've been playing holy priest fairly high since wotlk, so I wrote this guide a few days ago if anyone's interested: http://eu.battle.net...opic/7702200496.