I can certainly relate to this. I spoke with the hiring manager of a new role for which I ticked all the boxes in terms of the sort of skills and qualifications needed. I'm talking years of relevant experience with the hiring manager agreeing I was more or less perfect for the role. Except one thing, the role was posted at a higher level than I currently was and they just weren't willing to expend the political capital needed to sidestep that. I mean he was nice enough about it and offered to talk again in a couple months once they had more headcount at lower levels but the annoying thing was, if I was an external candidate that wouldn't have been a problem. In any case, I quit shortly afterwards and found a new role elsewhere.
I once applied as an external, rejected on grounds of being too experienced/senior. Then later heard they went the other way and hired someone more junior than me, by their own measure!