I was working on my multi-commercial and doing pattern work in a Seneca I. This was at a very busy, uncontrolled field on a Saturday afternoon. There were several other aircraft in the pattern, with a few trying to enter. As a result, the radio was full of chatter. We were on the departure leg, when we heard a 172 announce that he was on the 45 to enter. I announced cross wind and started to look for him. Neither myself or my MEI saw him until he rolled wings level just above us and within a hundred feet or so to the right. It turns out that his entry leg was nearly straight in to the pattern and we were looking in the wrong place. The CFI in the 172 was one of the most experienced guys on the field and we talked about how/why it happened later on.
The experience definitely changed my attitudes about keeping a look out for traffic.