Was trying to work on door alignment yesterday and got things pretty well set on the driver door. Or so I thought, as I ran into a problem...

I set the door alignment against the 1/4-panel so that there was about 1/4" of space btwn the door and the 1/4 and everything is flush. It's a bit tighter than that against the rocker - more like just under 1/8". I moved the latch pin inside the jam out to pretty much it's fullest outer reach to achieve the alignment - it's also pretty high too. I opened and closed the door a few times, but soon realized that the latch within the door mechanism was not holding in the open position when the door was opened. I was having to manually rotate the latch in the door up so that the "V" was open and would work. I also found that when the door was closed, I could move the door open and closed about 1/3 of an inch, as if it was only clicked shut but not fully latched. It WAS latched...

Does this sound like a further adjustment issue or more than likely a worn-out latch? Best fix? Just replace the mechanism, adjust the door more, or...?

I'm not sure if this hits on your problem but i have had latches that have been on cars with the door sagging and causing the latch to get chewed up by the door striker

Visually, everything appears fine - functionally is where I'm observing the problem...
The striker and the latch both appear okay...

You should adjust your doors without the stricker mounted. Once the door fits the opening correctly you add the sticker. I'd pull the door latch and soak it in solvent and then inspect to see if it is worn. Usually cleaning all the hardened grease out fixes them. Relube and install or replace it.

Pulled the driver-side latch over the weekend and soaked it overnight. Amazing how much funk comes out from the last 40 years! THe only obvious wear I could see what at the latch itself at the back of the "V". Instead of what I suspect should be more like a "V", it looks more like a U. I lubed it up and reinstalled it and while it is a bit smoother, the same issue persists with being not solidly latched. It double-clicks, but then I can pull the door out about 1/3" or so.

I don't want to order a brand new one without knowing it's work out, given for what one of them little suckers cost, but I'm starting to think that it may need to be...

Should be able to find a good used one.