Friends, I must thank one and all for your considered responses, especially Xyrus and PMM.
Now it seems like this is not so much an uncommon problem.
I agree I am lucky that I am in Canada and really feel your anger, Rhetorisch.
Anyway, CIC finally sent me the red letter (for those who are wondering what that is - it is printed on red paper - and has instructions on the photo size etc.). I do need to go in person to submit the pic :

.
I took the new set of photos today and will submit them at the St. Claire office on Monday.
Lets hope it turns out OK.
Lord if only they could take our photos on landing and just mail off the cards :'(.
Isn't that what happens elsewhere?