No it isn't all right. If you use "until" here you must use the negative: in fact the purpose of "until" is to create a limit before which something was not done (or known, etc.). It actually allows the negative.Can't see the logic behind it.
"It was until later on that we realized she had gone." = It means she had been gone for some time before we noticed that she was not there.
This is all right. But notice the "not" in the original sentence after "It was ....."