Having helped non-cs managers hire for technical roles, I feel your pain. Usually I start getting worn down around candidate 5-10 for in person interviews, and stop looking for colleague grade employees and more for "yeah, I could train them". Nowadays I've tried to tailor my interviewing style more in that vein; I ask for their approaches to problems I don't expect them to be able to solve alone, and then try to guide them towards a solution. I judge them based on where the conversation lands on the lecture - coworker spectrum.
What qualifies as a 'colleague grade' peer? Do they need to know your specific set of technology choices and be able to solve problems specific to your business during an interview that has essentially developed as a skill by those working with your group for a long period?
Technology is so diverse anymore and so dependent on specific sets of technologies a business chose mixed with internal work tailored around a specific business and its processes/problems that I think it's completely unreasonable to expect someone to walk in and solve the specific types of problems under the specific constraints any arbitrary group is faced with--especially in the span of an interview.
All these factors mix to make very unique problem spaces. Factor in that positions evolve by folks who formerly filled a role and that their specific set of skills are likely unique. You should be expecting to train people from the start to some reasonable degree unless the role is doing incredibly vanilla work (in which case I find it hard to believe there aren't qualified candidates).
Probably, I think 'colleague grade' peer refers to candidates that have worked on the same problems with the same technologies and arrived at the same solutions as the people working at the company.
I agree that there is definitely a bit/lot of tunnel-vision that happens within companies where they don't realize how much cumulative knowledge is just specific to the particular evolutionary path of their development team.
IMHO, so much of success is based on ability to learn that it would be better for candidates to be evaluated on their ability to acquire new skills or integrate new knowledge.
These days, we are surrounded by so much complexity that I'm getting quite often the experience of having to delve for a week into a subject so that I can start to appreciate which solutions are the most appropriate ones for the problem at hand.
(And then a few years later I realize that quite a lot of that was still wrong, but at least I picked among the best solutions rather than the worst - see also the "getting on the latest fad" kind of mistakes...)
