Right you are, Bill.
So, pictures should follow the explanation and yes it all works now

The "stem" of the door edge lock in the picture below will fit into the hole in the door edge latch. The door edge latch stem must not impede the sliding lock mechanism, visible thru the door edge hole. A previous mechanic replaced a part of the lock mechanism and for some reason elongated the rod between the outside handle and the inside latch. That had the effect of moving the lock slider (seen thru the hole) so
Much that a piece of the slider moved into that hole and collided with the door edge latch stem that is installed in the hole. The picture of the hole should illustrate that the hole should be a cavity with nothing to collide with the stem, no matter if the door is locked or unlocked.

 

The second picture I referenced

 

Oh, if I ever complain about thus in the future, please just refer me back to my thread.