The Shark was six stokes adrift of winner Eduardo "El Gato" Romero, who became the second Argentine golfer to claim the US Senior Open.
Romero shot a final round three-over 73 and was six-under 274 for the tournament.
Funk (75), who began the day two shots off the pace, failed to cut into the deficit and finished four stokes behind.
Funk's quest to become the fifth straight come-from-behind winner died with a triple-bogey on the par-4 13th.
Mark McNulty (68) finished in third, five shots back.
Romero, one of the big hitters on the Champions Tour who regularly hits driver-wedge into the par-4s, is the first international winner at the US Senior Open since Australia's Graham Marsh in 1997 and the first to hold both the 54-hole lead and the trophy since Bruce Lietzke in 2003.
Romero can expect a hero's welcome when he returns to Villa Allende in central province of Cordoba, the same city where his Argentine compatriots held a parade for 2007 US Open champion Angel Cabrera, whom Romero once sponsored on the European Tour.
Romero said both Cabrera and De Vicenzo, the godfather of golf in Argentina, called him this week to offer encouragement. He said De Vicenzo told him, "I think this is your week."
Was he ever right.
Romero grabbed the lead on the 12th hole Saturday, led by two strokes heading into the final round and never gave the rest of the field a chance to catch him on Sunday.
Norman, who held the 54-hole lead at the British Open two weeks ago, is skipping the PGA Championship at Oakland Hills next week.
