Cory,
I have no experience replacing the latch, but I have a side cover that looks exactly like yours, where the latch seems to have broken internally: the slotted side rotates, but the latch side does not. I also have a TM500 "toolbox" with a solid cover and a similar latch mechanism. The latch seems to be made of two parts, the latch side and the slotted side, which snap together on a central shaft. I would expect that you could push the center shaft out of the latch side with a small screwdriver or punch, but I haven't tried this. If your latch is broken like mine, however, you don't have much to lose by experimentation (nor do I, so I will see what I can achieve).
One solution would be to simply glue to the two halves of the latch together, maybe by dripping some epoxy down the hole on the latch side. This would be a fairly permanent fix (you would not be able to take the latch apart again without some amount of destruction) but I imagine a permanent fix is kind of what you are looking for.
-- Jeff Dutky
