The erstwhile rally leader began the afternoon with a 17.7-second advantage over Ogier, which was whittled down to 12.3s after Latvala's engine stalled towards the end of the Monte Olia test.
Things went further awry for the Finn early on in the lengthy Monte Lerno stage when he hit a rock and damaged a wheel, forcing him to fit a spare and losing two minutes in the process.
His misery was compounded by Ogier winning both of second loop's stages and the championship leader now has a 1m40.2s advantage over the rest of the field.
Mads Ostberg has moved up to second overall following Latvala's misfortune and 21.3s separates the pair after the latter fell down the order.
Andreas Mikkelsen was the second Volkswagen driver to experience a problem, having broken a damper on Monte Olia and losing almost 42.5s to compatriot Ostberg on the final stage.
Elfyn Evans moved up to fifth after M-Sport Ford team-mate Robert Kubica stopped on SS12 a kilometre from the finish after an accident.
The team reported he had lost his front right wheel.
- Sports & Recreation
- Mads Ostberg