I have the same faucet. Same type of diverter. I took out the diverter per your and others on YouTube instructions. Wanted to see if lime and scale were causing a bad seal. So I put my finger in there. What came out stumps me. A chunk, like flat thread of metal. Put it together and it still leaked. So I took it apart again. Thats when the second sliver fell out. Two slivers of metal. I thought it was the faucet, but I think what I got were two pieces of solder. It works like new now. I'll see how long it lasts, but it operates smooth and really stops all water from running out the faucet and it all comes out the shower head now. It even unlocks when it's turned off and drains out the water from the faucet. I won't have to remember to push it down now. So better than before. Has this ever happened before? I thought those pieces were a worn out piece inside, but it seems like they were in there since the install. I attached a pic to this alternate answer.