We have the opposite problem in our upstairs bathroom, you can plug it but it won't go back up to drain. We've tried to fix it a couple times to no avail.
Have you checked to make sure the ball is actually catching where it's supposed to?
I wish I knew the actual terms to describe the pieces, but I don't. I just helped Calvin install ours in the half bath.
If you know or can figure out which faucet you have you can probably find the diagram of the parts online, and see how the engagement is supposed to work between the plunger piece and the drain cover.