People lose passports every day and they are replaced. The key is to focus on what's needed to replace a passport. In OP's case, spending days tracking down a non-existent consulate when it's the local police station he needed, is a good example.

Don't worry about what the outsourced visa office thinks. All they care is that their contract requires them to physically see a valid passport. OP's won't be the first or last new or replacement document handled.