Improvements in control of renewable energy-based microgrids are a growing area of interest. A hierarchical control structure is popularly implemented to regulate key parameters such as power sharing between generation sources, system frequency and node voltages. A distributed control infrastructure is realized by means of a communication network that spans the micro-distribution grid. Measured and estimated values, as well as corrective signals are transmitted across this network to effect required system regulation. However, intermittent latencies and failures of component communication links may result in power imbalances between generation sources, deviations in node voltages and system frequency. This paper proposes a hierarchical control structure to regulate the operation of an islanded AC microgrid experiencing communication link failures. The proposed strategy aims to virtually sub-divide the microgrid into controllable "islands". Thereafter, active power sharing, frequency and voltage restoration is achieved by competing converter systems through multi-agent consensus. The effectiveness of the proposed methodology has been verified through stability analyses using system wide mathematical small signal models and case study simulations in MATLAB, Simpower systems.