The problem for me wasn't finding the demigod, my demigod actually had a problem casting the spell on an ally, the problem only seems to occur at the start of the game then goes away, it might be a problem with casting low level spell on a demigod.
edit: the bug seems to be with level 1 shield and maybe sednas healing, both spells don't seem to be able to target allies until level 2 or higher.