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It sounds like the mechanism inside the mortise lock has broken. You might have to replace the whole thing. Before you do, though, I have one thing in mind you might want to try out. Fully remove your patio door handle, but keep the mortise lock in the door. Then, with a flat-head screwdriver, try to manually work the lock and see if it's still having problems. If so, then you will likely have to replace it. If not, then the problem may lay with your handle. Let me know if that's the case and we can work from there.
As for the lock itself, yours looks a lot like our 82-218
. I would consider that for a replacement. Just make sure all the dimensions match. Now, when you replace it, there is a real risk of it falling in the door. That's a common problem actually. Our solution is to hold it firmly by the tooth with a pair of pliers. However, you won't be able to do that since your tooth can't come out of the lock. You are just going to have to try your best to get a hold of it with your pliers to make sure it won't fall in. See the video below for more details on how this lock is usually removed.