Sorry guys. Full instance has to do with the server being full in a particular location. Although this is a bug, and is not always the case..... But a Full Instance is NOT when there are four wizards in a battle.
Okay... something that I have found works, MOST (not every time) of the time......until they get the bug thing fixed.......
But for those of you recieving this message in battle in a dungeon.. If you flee, and can not get back into a dungeon, etc. because of FULL INSTANCE, run aaaaalll the way back to the entrance of the dungeon and go through the dungeon entrance like you were going to start the dungeon over, then try to teleport to your friend. Usually that works and if it does, it will get you back on track and playing with the people you came in with.
Honestly, in my opinion, I know that the Full Instance thing is a bug that KI is working on, BUT, if they kept the FULL INSTANCE block on, on purpose and made it where it is REQUIRED to run all the way back to the entrance of the dungeon (like i mentioned above), it would be more challenging. It would be kind of like a 'penalty' for fleeing. It's just to simple to say, "Hey no problem, i'll flee and teleport back to you and use my bottle to refill my mana." Just an Idea for Kings Isle