"¿Qué puede estar pasando?"
Translation:What can be happening?
That is partially correct, but there is also the subjunctive tense ("pueda" for present) which is appropriate for statements of possibility as is the case in Duo's example. The conditional tense is just that, for a condition: I would be able to talk if my mouth were not full. I won't add the spanish because it will confuse people.
That's correct. ¿Qué podría estar pasando? is the literal translation. When we learn English from Spanish, it is taught like that.
[verb]-ía“ -> would/could [verb].
So, I don't understand why “what can be happening?“ is odd...
Is “What may be happening“ odd likewise?
You're with a friend and your computer keeps rebooting all the time. None is a computer expert and he asks ¿Qué puede estar pasando?, of course he could ask ¿What is going on?, but this is more of requesting a suggestion more than a solution. The speaker does not really expect that the answer is the right answer. My translation would be something like: what do you reckon?, but literally, of course is that.