The Borg Queen existed when Piccard was taken by the Borg in season 3. Yet in the season 6 finale/season 7 opening Lore is leading a group of Borg due to the need of a leader. How could that happen if there was a Borg Queen?

The borg drones that Lore was leading were the ones from the ship that Hugh was returned to. So I've always assumed that it was only the ones on that particular ship who were first effected by the sense of individuality that Hugh had and that the Borg queen wasn't on the same ship. Even though they started out connected to the hive mind and the Borg queen, they probably disconnected themselves from her and the other borg on other ships as soon as they started thinking like individuals. After that, they didn't know what to do with themselves and that's when Lore found them.