With the recent patch, we made a modification so that the quest progress gets saved for the client side as well in co-op mode. Therefore, you need to have at least the same progress level as your friend in order to be able to connect to him.
Since we had a lot of feedback about the multiplayer progression, we were kind of forced to make this change. However, the game simply can’t guess where you were in a random server, you could’ve played on 5 different servers with totally different progress, which one’s progress should be yours? But to be able to copy the progress, you have to progress to at least the same level as the host is, because you would miss out content – and we do not want that!
I understand that for now it’s quite irritating that you can’t continue the story, but it is for the greater good! Or at least for your good. You will like this change when you don’t have to replay the game to be able to play neverending story, or scenario together.
However, we will implement a console command soon that will allow players to copy progression to one save from another, which will help if you do not want to play everything over again with your friend. Until then, my advice is to switch roles, the player with the lower progress should host the game, and you will be able faceroll until your current progress with your high level characters, then you can continue with the original world, or the newly created one.