I figured this was the problem. Basically your verts aren't merged together in places. Go to Vertex mode, select them all and go to Edit Mesh > Merge. It should just merge the verts that are sitting on top of each other together. Make sure other vertexes aren't jumping to merge together either.
ah, that one worked, thankyou
No problem, at which point you should now be able to double click one edge in your hole, it should select them all. Then you can 'Fill Hole'. You should now also be able to extract the faces into their own object now without any problems.