[hypoxia]

Sounds like option 3. You just want to prevent a stuck-on handle from doing the watusi on the latch.

What causes the handle to stick?  None of mine seem to have any interference.  

The mechanical release failure is concerning, what's the point of a backup feature if it doesn't work.  Do you think pushing in on the door would have released pressure allowing the rod to release the latch?  Now that we can see the internal parts, do you think it would be possible to move the release rod around and perhaps reengage the release?  What tool would do that?