Is there an explanation for the difference in observations? Yes. People at different levels simply rate different qualities. Line managers rate their subordinates on performance criteria, whilst the subordinates tend to rate relationships.
Why the coachees did not see any change? Internalization takes time
Coachees may have been rating themselves on how they felt rather than their actual behavior. Observable behaviors need to be reinforced by feedback in order to create an internally felt change. When the coaching period was rather short, there may be a timelag regarding the internalized change that can be recognized by coachees. Therefore it is extremely important to schedule a three-way review meeting at the end of every coaching assignment. The coach, coachee and his or her line manager must provide feedback. That will reinforce the change and maintain the momentum of on-going changes.