So, after 2-3 failed attempts to crawl Gnomergan, I finally managed to find a PUG that didn't blow chunks. Of course, it probably helped that we had a 37 rogue and I was a 40 priest (with the other 3 players in the 29-31 range). The mobs in there start in the mid-20s and gradually get into the low-30s.

We had at least half a dozen "blue" (items that are rare and of better quality) items drop off of mobs down there. Two or three of the drops were off of "trash" (NPCs with generic names) mobs. I think the mage got 2 upgrades and the warrior got 3 upgrades. I ended up doing a greed roll for the 6th drop that nobody wanted and sold it for 30sp to a vendor. Everything was "bind on equip", so it couldn't be taken and sold at the auction house.

One funny thing was that two of the players were from a previous Gnomergan group. Except that I had been playing my 20 pally at the time and got drafted in as group healer. (Yeah... that didn't go well.) Things go a lot better when you bring a full-time healer like a priest / druid / shaman. There are simply a lot more tools at my disposal (heal-over-time, group heal, shield ward, stamina buff, de-aggro) as a priest healer.