The breakdown follows a major daggerboard problem on day one, which forced them out just seconds into the race, while they also incurred damage to their wing on Monday.
On that occasion Luna Rossa were able to nurse their boat around the course to take their first win over Team NZ, after the Kiwi boat suffered a breakdown of their own on day two.
"It is getting massively frustrating - at the moment the racing has been governed by who can get around the course as opposed to who wins the races," said Luna Rossa strategist Giles Scott.
Yesterday's breakdown on the Italian boat was particularly disappointing as for a moment there it looked like we were going to have a real boat race on our hands after Luna Rossa got off to their best start of the series, coming off the line to windward and even with Team NZ.
They trailed by just two seconds at the first mark, and were putting the Kiwi team under real pressure down the first run before a slow gybe gave Team NZ a bit of breathing room.
They were soon handed total control of the race as Luna Rossa came to a standstill shortly after rounding the second mark.
From there Team NZ were left to sail around the course unopposed to take a 2-1 lead in the finals. While that seemed a straightforward task, given the Kiwi boat was in the same position on Sunday and was involved in a mishap, no one was willing to notch up the point until Dean Barker safely guided NZL05 over the finish line.
Team NZ grinder Chris Ward, who took an unscheduled dip following the nosedive incident on day one, said although it would be nice to see two boats complete a race, breakages were just the nature of the on-the-edge racing machines.
"To have three races and have a breakdown every race is a little bit unusual, but in saying that the boats are a lot closer to the limits than they've ever been before. It's like a formula one car - something small goes wrong and it stops you," he said.
Yesterday's second scheduled race, which was due to start 30 minutes after the completion of race 3, was then postponed after the wind picked up in San Francisco Bay - as had been the case in the two days prior.
The continued setbacks have put the regatta behind schedule and means regardless of how many races organisers get through tomorrow, they'll need to use another reserve day on Friday to clear the backlog.
The good news is the tidal conditions later in the week should provide race organisers with some relief.
A strong ebb tide over the opening couple of days meant the adjusted wind limit was brought down into the 18-knot range early on in the series, but with the races later in the week scheduled to coincide with a flood tide there is confidence it will allow a full day's racing.
"With the wind limit set where it was and the ebb tide it is pretty restrictive. We knew two weeks ago it was going to be difficult to get two races in a day - that's what the forecasters were telling us," said Ward.
"I don't think we'll have the same problems once we hit flood tide."
Races four and five are scheduled for tomorrow, while at least one race will be held on Friday's reserve day.
The damage so far
Race 1: Luna Rossa retire from race with a broken starboard daggerboard; Team NZ rip away their fairing after their boat takes a nose-dive following a miscued bear-away.
*Race 2: Team NZ are forced to withdraw from the race after their hydraulic systems fail - later found to be caused by a malfunctioning battery pack; Luna Rossa complete the race to take the point, but incur damage to their wing.
*Race 3: The Italian team retire early in the third leg after breaking one of the control lines at the bottom of their wingsail
Next race day:
Tomorrow
Race 4 - 8.10am, Race 5 - 9.10am
