Thanks guys for your help! Yes I took it to that mechanic, he just pushed down the hood a little while I was holding the inner release handle pulled out and bingooo! It releases.

In fact, I had my engine washed (mixture of compressed hot air + some water) and this caused the locking mechanism to get seized.

The cable was checked found ok; when you pull the handle it starts moving all the way with almost no backlash, but the movable spring-loaded locking plates (where the pins go inside) were seized due to lack of lubrication. When we applied some grease there it regained its operation successfully!

By the way, we (the mechanic & I) couldn't find where to calibrate the cable. Any ideas?