I don't think that this has anything to do with the upgrade processor being broken. When the U space is made available you will get it.

If there is U space and you are not upgraded... then the upgrade processor is broken. That happened to me once. Call them and they will upgrade you.

Also remember that your view of the waitlist only shows people who have checked in. So people may be ahead of you, but not yet checked in. Having said that, it sounds like you will get an upgrade no matter what (whether you are 1st or 2nd or 3rd doesn't really matter)