I was going to ask for pretty much the same thing. The way I have seen this handled on other sites is to initially bias the drop-down list of suggestions to users who are active in the current context. So entering @ would immediately show a short list containing only the most relevant users (i.e. the observer, and anyone who has suggested an ID, or left a comment on the observation). Typing more letters would then bring up the full list (if the letters didn’t match anyone in the short list).
What I find at the moment is that I often have to type in almost the entire username before it appears in the list of suggestions - which pretty much defeats the purpose of showing it in the first place.