What I can only explain as my spirit body entering the instance, I found mobs in Arah completely invisible for the first third of the instance.
http://i.imgur.com/M6l2s.jpg
My party was fighting some sort of boss in that screenshot. I could see my party and any friendly NPCs in the instance. Other than that I was unable to interact with anything in the instance. It seemed perfectly fine after we got to the airship portion of the dungeon.