Could it be he/she as well as it?
It could be her; not him because of the participle's gender.
If anybody else gets donged for translating as "I found it at last" - rest assured, your English is perfect. It is DL which is at fault.
Why wasn't "I have found it eventually" accepted?
Couldn’t it be “Finally I have found you” as well, using the Lei formal you? Or would the L have to be capital?
Is there an audible difference between "l'ho" and "lo"
If there is my ear does not detect it.
l'ho is supposed to have an 'open' o like in 'hot', whereas lo is supposed to be 'closed' like in 'cozy'.
However, due to different local influences, there may be no distinction audible.
Bottom line: your ear is fine :-)