I started playing recently and have read through the Detailed Rulebook as well. I've started trying to put a deck together on my own and have run into a problem.
I have a water/underworld deck and when I attempted to place a 3rd Bone Dragon into my deck, it said I had 0 of those cards remaining. I can clearly see if I go another deck that I have 2 still available to use.
Underworld is my sub group and I understand I can only have 16, so this was no the issue but I should be able to have up to 4 of these, correct?
I think you have made the same faulty assumption I made when first starting. Think of the cards owned as a pool of cards available for every deck you design. Using a card in one deck does not make it unavailable for another, unlike a physical set of cards.
In a physical set of cards, if I own one zombie mob and I place it in deck A, I cannot place it in deck B without dismantling deck A. In Spellcraft's electronic decks, I can place 1 zombie mob in every deck I build -- even if I only have one copy. (Think of decks as blueprints for how the computer is to create a set of cards from your entire pool of resources every time you play a game.)
From your description, I think you only actually own two copies of bone dragon.