I have posted about this issue before, and found a few other people who have had the same issue with no solutions found.
I am developing an Android app that submits a JS
I had the same issue with the regular Location API earlier. I swiched to Play Services, and it seemed to work. Lately sometimes I experience this issue again with Google Play Services. It is really strange, and based on my experience the probelem is system-wide, so when my app couldn't find location, than the Google Maps app couldn't eather. Note that I use Cyanogenmod, so it can be some bug within it.