I'm sorry for your loss and I'm sure that its maddening.
Since the housing works at home (for multiple dives over several months, I'm guessing) and fails on vacation, my first thought went to your workflow for preparing the housing.
At home, I almost always set up my rig the night before with a significant amount of care in a well-lit place. I also know that I don't have any pets to contribute hair and I usually assemble things in the same environment.
On a vacation, one might feel short on time and the assembly environment might not be optimal. Some people get rushed or try to set up their camera right before the day's diving. This can lead to errors.
Most housing floods that I have personally seen have been attributed to user error and lack of attention to detail during assembly. I'm not saying that you did anything wrong, but if a housing only fails twice out of many dives with similar profiles, then its probably not the housing, its probably the user.
I've used Oly housings (C-5060) and Ikelite housings (C-5060 and D80). I also have several Canon housings (SD800 and G9). The Ike housings are definitely a better design, although the Oly housing was sufficient.
jcclink said not to "grease" the o-ring with anything. I think that the Oly o-ring does require lube, although it may be a special lube provided or sold by Olympus. If the instructions say to lube, then do it. I usually wipe the length of the o-ring with a lint free cloth, being careful not to stretch it. I then put some lube between my thumb and forefinger and gently pull the o-ring through it, once again being careful not to stretch it. I put a very light coating on the o-ring. I remove any specks or fibers. I use the lint free cloth to wipe the housing o-ring channels clean before reinstalling.
I've kept my housings latched shut for months at a time with no ill effect. It is not good to leave them latched for plane flights because some of the air can diffuse out of the housing during the low pressure trip in the plane's cargo hold creating a vaccuum that can make it difficult to open the housing. That's my only issue with leaving it latched.
Good luck on your next camera.
David
underwaterpaparazzo.blogspot.com