The red lines in the layout showing which elements should be connected together are not showing up.
Check to make sure the layer RatsNest has its Show Fill selected on in the Drawing Layers dialog.
By default rats lines only draw for the current level of hierarchy you are viewing. You can tell the layout to display the rats lines at all levels of hierarchy by having a layout window active and selecting Layout > Layout Mode Properties. Then select the Draw all rat lines option.
See Documentation for more details on using layout modes.