Best solution that I see is the one used in virtually every other game:

When you disconnect your character is still in the group but it says OFFLINE instead of your name. You are still a member of the party until removed by the leader. This will keep you within the instance portion of the leve and let you continue from wherever you or your party left off.

These are simple concepts people. I don't care if you don't like copying other games. Simple concepts that work and work well shouldn't need to be reinvented for the sake or reinventing.