Greetings, I am also experiencing a similar issue in Moodle 2.6.1, but am not (and have never) used groups. Both students and teachers are able to post an initial response to the Forum thread they are subscribed to; however, neither can see anyone's response (including their own) and all they see is a blank page where the response should be (no reply button).
I have a separate thread here, Forum NG:CANNOT SEE FORUM POSTS, with screenshots of the Forum settings. I was hoping to take a peek at Katherine's settings to compare, but I'm hoping you (Sakshi) can take a look.
Note, although the attached screenshot reflects the forum type, Each person posts one discussion, I am also experiencing the same issue with the other forum types, including Q and A (which is what I would really prefer to use). Unfortunately the size limitations for attaching files is rather difficult to accommodate the attachments I have to better describe the issue.
Thanks in advance!