I have the same problem. I am flying home to Switzerland at the beginning of March and I am booked on Flight 22 out of New Orleans. Since I am flying with DL 22 all the way to CDG, I could not select my seats and when I called Delta it took almost an hour to have that sorted out. Same problem, I asked her why I am not elegible for upgrade on MSY to ATL leg and the answer was that since it is an international flight, I won't be able to upgrade. I will check with the CRC in MSY the day of my flight and see. Granted the flight from MSY to ATL is only an hour, but hey if I can sit in first, why not.
Last time when I flew with Delta, I also had problems with the upgrades, I then went to the CRC. The agent there was very helpful. She informed me that Delta had over 50% new gate agents ( I don't know if this is nationwide or just MSY) and therefore the agents don't know what they are doing.

Sorry that you had to sit in coach for 5 hours when you could have flown first.