It's a Honda.. Sure hope that you was not expecting a quality product when you bought it..

I have saw $99.00 Walmart specials that cut better than any Honda I have ever saw.

Sounds like you are mulching wet grass. The Honda 'Quadracut' twin-blade system is sometimes too good for your good. This is particularly true when mulching in wet or overly moist conditions and cutting too low and/or cutting too much grass at one pass. The twin blades 'puree' the clippings, turning them into a green slime that sticks to the housing and even the blades. When a ball of this stuff falls into the blades, it can make the blades grab a clump of grass and yank it out.
I cured mine by removing the upper blade, using the discharge chute (optional accessory) and raising the deck. The Honda rear-discharge chute does a great job of dispersing the clippings to avoid windrows. When things dry out in a day or two, you can go back over it and bag or mulch at your regular height of cut.
Also, take a look under the mower to make sure the blades are on correctly and are sharp. You might also find a tremendous build-up in the deck that has to be removed.