but not the most desired candidate, or the top 1. For some reason, they cannot extend an offer to their top candidate, or that person is not ready to accept.
That's the usual case. However, there is exception to anything. For example, due to structure change etc, the original budget/opening is in question. Therefore, they said "trying to do something for you". Or in a very rare case, they do like you, but probably not necessarily for that particular position, and they are trying to work something out to create a new spot for you.
Those all happened before, but that being said, it's all speculation. You need to do 2 things: 1. Keep looking as if this never happened 2. Keep following up until you get a definite answer (phone calls sometimes are better than emails). But, you never want to look/sound desperate, and don't play tricks about you are considering other offers etc.
Good luck!