I had this same problem. In addition to that, apparently the latch got bent and won't click. I'm using a little Redneck Engineering to secure my mount. Feel free to try this as well, at your own risk:
Unfortunately I need a couple more things before I do this, so I'll give it a shot early tomorrow morning.
What you'll need:
Electrical wire.
Needle nose pliers.
Wooden dowel (1/2" is too small so I think I'll try 3/4")
Wood screw, one short and two a little longer.
Liquid Nails (or other strong adhesive)
Maybe a dremel or small saw.
1) Find electrical wire, the bigger the better (so long as it fits in the screw hole). Use the needle nose pliers to feed one wire through each hole and lead both out of the gap. These will be permanently installed for stability so don't use something too thin and try not to move it around too much.
2) Cut your wooden dowel to the same length as the gap in the iMac and lay it in place over it. It should slightly sink into the gap, with one end of each wire going on top and one going on bottom. If you'd like it to sit more flush, cut notches into the back of the iMac with a small saw or dremel to hold the wires.
3) Wrap the wires around the dowel and tighten it into place.
4) Place the VESA mount on top of the dowel, making sure that it fits flush with the iMac chassis but the dowel is still snug behind the mount.
5) Move the VESA mount aside as you use Liquid Nails to secure the dowel to the iMac chassis, and also secure the wires. You might want to let the Liquid nails dry before continuing to the next step.
6) Place the VESA mount back over the dowel and chassis, with liquid nails secureing wherever they touch. Put one screw into the hole in the center of the mount (make sure it's short so it barely goes through the dowel). Put one longer wood screw into the hole on the left and right side of the mount, so it goes into each edge of the dowel.
7) Once the Liquid Nails dries, it should be ready to hang.