Read up on water:
You shouldn't be using either distilled or RO water for AG brewing, without adding back the proper salts. For all intensive purposes RO is the same as distilled, so you can't blame your eff. lose on the water you are using.
I'd blame your efficiency on how you are fly-sparging (you should be getting 80-85% easy with that method), or grain crush. If I were to bet, I would say grain crush is the issue here. It is the predominant issue of blame on most forum posts about bad efficiency. I would also predict that your LHBS mucked with the crusher which caused the dip in efficiency.
Keep in mind that your LHBS is in the business of making money, and also for keeping customers happy. If they can sell more grain and prevent a customer from complaining about stuck sparges, all at the same time...its a double win for them.
Getting your grain from another store will answer the question if grain crush is to blame.