So we all know the problem with Elo hell. The problem is that terrible players get grouped up with decent players and ruin the experience. Now, the problem isn't that matchmaking sucks, but because the rating system is flawed. Now here's why:
When you start out, you get an inflated Elo boost. THIS! IS! BAD! Not only does this put you into a place where you don't belong, it also makes it so you get on a winning streak and then get placed with people who are insanely good compared to you. What SHOULD be done is a standard placement like what new players have, except THAT IS ALL THEY GET. You play a game at various ratings levels, and then you are.
Another way to fix it, is that ALL NEW PLAYERS TO RANKED should be forced at a default Elo rating, similar to how HoN does it. Now, it should not be 1500 because that is too high. I suggest 1100-1200 range to start with, again with no rating inflation for new ranked players, as that is not how the ratings system is supposed to work. You shouldn't be rewarded because you're new, you should be rewarded because you did well.
Number three: Please, please, PLEASE allow a vote kick option in the lobby. If you have a player who is constantly being a nuisance ("I'm feeding if I don't get Master Yi"), you should NOT be required to play with them. At all. All this does is breed negative behavior among people already playing. I've actually gotten so sick of these people I have left games because of it, not as a ragequit, but because I have better things to do than be insulted by players in a game.
Number four, I shall give you a link to Elementz's idea, he explains it better than me: http://rog.clgaming.net/blogs/board41-reign-of-elementz/4371-league-of-leagues/.
Remember, this is NOT a matchmaking problem, this is an inherent flaw with the system regarding new players getting inflated ranking, and then ruining it when they still have no idea what they are doing compared to the other players they are with.