I have a model folder (~/rodain/models) where i store my gazebo models. Running gazebo four out five of these models are seen on insert tab.

Path is correctly set::

  echo $GAZEBO_MODEL_PATH
 /home/bruno/rodain/models

I also checked whether there is a .config and .sdf and if they are in the correct place. These are my my config and sdf files and i'm using gazebo 7

 <?xml version="1.0" ?>
<model>
<name>Blender_DC_Shell</name>
<version>1.0</version>
<sdf version="1.6">model.sdf</sdf>
<author
    <name></name>
    <email></email>
</author>
<description>Version of DC_Shell made on blender</description>
</model>


 <?xml version='1.0'?>
 <sdf version='1.6'>
  <model name='Untitled'>
    <link name='link_0'>
      <pose frame=''>2e-06 0 0 0 -0 0</pose>
      <inertial>
         <mass>1</mass>
        <inertia>
          <ixx>0.166667</ixx>
          <ixy>0</ixy>
          <ixz>0</ixz>
          <iyy>0.166667</iyy>
          <iyz>0</iyz>
          <izz>0.166667</izz>
       </inertia>
    </inertial>
    <visual name='visual'>
       <pose frame=''>0 0 0 0 -0 0</pose>
       <geometry>
         <box>
          <size>1 1 1</size>
        </box>
      </geometry>
       <material>
        <lighting>1</lighting>
        <script>
           <uri>file://media/materials/scripts/gazebo.material</uri>
           <name>Gazebo/Grey</name>
       </script>
       <ambient>0.3 0.3 0.3 1</ambient>
      <diffuse>0.7 0.7 0.7 1</diffuse>
      <specular>0.01 0.01 0.01 1</specular>
      <emissive>0 0 0 1</emissive>
    </material>
    <cast_shadows>1</cast_shadows>
    <transparency>0</transparency>
  </visual>
  <collision name='collision'>
    <laser_retro>0</laser_retro>
    <max_contacts>10</max_contacts>
    <pose frame=''>0 0 0 0 -0 0</pose>
    <geometry>
      <box>
        <size>1 1 1</size>
      </box>
    </geometry>
    <surface>    
           ...
    </surface>