According to my calculation 35.5K was a reasonable price given the false assumption of 8% PST. I would suggest you shoot for a sale price of 34.5K.
The thing is that when you negotiate you have to know what is the most you are willing to pay. If you can't get the car for that price, walk out the door and wait to see if they contact you.
The other thing I would advise you is to avoid developing tunnel vision here. There are lots of other good mid-size sedans to consider like Mazda6, Camry, Altima, Sonata, Malibu, Fusion so if Honda won't play ball, someone else will. It is a buyer's market and sometimes Honda dealers can be quite arrogant.