Latvala had been 30 seconds in front of five-time Monte winner Loeb going into today's final stage, but rolled his Ford and was forced to retire.
All of Loeb's nearest competitors had tough ends to their days, with Ford's Petter Solberg ruing his use of two snow tyres on what was now a mostly dry SS4 and Loeb's Citroen team-mate Mikko Hirvonen damaging a brake in a minor impact with a wall.
Their delays allowed Dani Sordo to move back into second for Mini despite damaging his suspension in an error this morning, although the Spaniard is 1m04s behind Loeb and just 1s ahead of Solberg.
Loeb ended up with the fastest time in three of the four stages, despite a poor tyre choice early on a cold but dry day on icy mountain roads around Valence.
Sordo, meanwhile, hit a bridge with the rear of his car while braking through a left corner on the second stage and then ploughed into a snowbank, losing around 15 seconds as he backed out.
"I keep being asked if I can challenge Sebastien Loeb for the win, but after the last stage I am not sure I can as his time was incredible," said the Spaniard.
Sebastien Ogier therefore holds an astonishing fourth place overall in his S2000 Skoda - thanks to some very rapid stage times as well as the WRC field's issues. The ex-Citroen WRC driver is just ahead of Evgeny Novikov's M-Sport Ford and the delayed Hirvonen, with Francois Delecour holding a highly respectable seventh on his WRC return with another WRC Ford. Thierry Neuville retired from his Citroen debut on the day's final stage.
P-G Andersson's Proton holds 10th overall and leads the S2000 class, albeit as one of only two cars still running in the poorly-supported division.
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