Thanks for the suggestion guys. I thought about what you guys said and I took my passenger side door panel off to compare.
AND I FIGURED IT OUT!!!!!
I know exactly what happenned now. The rod from the outside handle popped off while I was driving and got caught by the window when I was rolling it down ( the crunching noise) which forced the door to unlatch and open. (porchify and j_t_heilbren you were both right on the money) The window then pushed the rod down further and forced it against the rod that activiates the locks - locking the latch mechanism closed. That's why it wouldn't latch when it first happenned. It also bent the rods.
It took a few hours to figure out and fix but I did it. I took pictures while doing it too and will be writing it up in case this happens to anyone else in the future.
Which brings me back to the Honda dealer. For the record it was Regency Honda in Vancouver - Chris was the mechanic who looked at my car and Robert Dent was the service advisor I dealt with. ABSOLUTELY trying to rip me off!
There was no way they could have missed the problem because the outside handle rod would have been out of its housing and just dangling there in plain sight. In fact they took the trouble to put it back in the housing so I wouldn't know that that's what happend. And, they adjusted the length (when I post pictures you'll see how the length is adjusted easily) so that it would not operate the latch thereby making me think that I really did need a new latch when in reality it was just the rod had popped out and gotten bent up a little.
Remeber in my post it sounded fishy?
Before they looked at my car they told me that if it was the latch, it would have to be a special order part. It's something that they've never had to replace because they've never had one break and so they've never had to keep a part like that in stock.
After they looked at my car, all of a sudden they had the special part and lucky me, they'll give it to me for $100 cheaper than what it would normally cost and no extra labor to put it in.
No wonder they just "happenned" to have a special order part in stock!
What should I do now? Go and file a complaint with Honda Canada? Go to the media? Better Business Bureau? All three?
What would you guys do if someone tried to rip you off? Makes me sooooooo mad!
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-95srv