Has anyone else had this problem? I find it impossible to make a true overcast layer. When I should be in the clouds I can see the ground! I've messed around with the display settings for weather and this hasn't changed anything.

I think you'll finf it nigh on impossible to do that. It's been a bugbear in FS9 for many. You could try creating more than one layer of cloud and that will get you near it. The other option is to try an addon weather engine like ActiveSky 6.5 (I highly recommend it) which gets close to it in my experience. I'm sure others will chip in with comments too. Good luck