Same issue here.
Nagios.log doesn't log anything. I also tried debug to 256 and nothing is logged there either.
I'm running nagios 3.0.5-1 for RHEL 4 (nagios-3.0.5-1.el4.rf)
I can disable services individually or the host itself but if I try to use "Disable notifications for all services on this host" it says it is done but in reality, it doesn't do anything,
It really looks like a bug to me.