Circles > Settings > View blocked reports that I haven't blocked anyone. The "Block someone" link says you have to unblock them them, but doesn't tell you how exactly hangouts expects you to unblock them apart from Circles > Settings > View blocked, which says no one has been blocked. This was my first hangout, so I assumed the "cancel" icon was to keep participants with too much background noise from dominating the stream; didn't realize it would permanently block me instead of temporarily ignore them!