I thought this tip deserved its own thread in order to get more eyes on it to help as MANY people as possible having the co-op/multi-player problem.

I can confirm that this fix actually works since I tried it myself:

"A Friend and I Fixed our Multi Player Lobby Creation Problem. We UNblocked everyone on our Blocked Friends list, exited the game and went back in. We can now create lobbies. This worked for both of us."

I take NO credit for finding this. Credit belongs to MrSnufelupagus of GameFAQs.

Source: https://www.gamefaqs.com/boards/1418...es-ii/75370495

So basically you just need to check to see if you have anyone blocked on PSN and simply unblock them all and it should work just fine and will remain fixed so long as you don't block anyone from then on.