Sigh...now my upper tailgate wont latch shut.
 

I have the soft close trunklid.

The upper tailgate latch will not lock on the lower tailgate striker.

I tried manually engaging the upper tailgate latch but it will not lock. It springs back to open position.

When pressing the trunklid soft button, dash button, and key fob, you can hear yhe solenoid working.

I tried removing and reinstalling the softclose fuse (84 I think), and switching around the relays at the back (the same-colored ones only), no go.

What could it be?

Similar problem here, though it seems to lock if I lock it with the key fob or lock button. The light stays on, though... anyone know which fuse/relay controls this?

I believe yours might not have soft close as that appeared in the 2004 facelift?

In my case the tailgate lights were also on. A microswitch in the latch assembly turns these off when the latch fully engages. There is no body pinswitch for the tailgate lights.

After ruling out fuses and relays I pulled the latch mechanism from the tailgate.

The latch assembly is riveted together so I couldnt see the entire mechanism, but there is a portion with a removable plastic cover. Removing this cover and fiddling with the mechanism, I could see that putting a stopper at a certain point would allow the latch to engage and disengage. Something must have broken inside and I was lucky I could jury rig a fix from the exposed portion of the mechanism.

From your description I believe your problem is the latch as well. I think the latch assembly for the pre-facelifts is about $100 or so new. You're lucky you dont have the soft close latch, that one is $400.

Hard to install?