Why would crushed ice come out when cubed ice is selected?

crushed ice is better for your Margareta anyway... but chances are the switch or button that allows you to select crushed or cubed is broken...

Check the evaporator system, that release the cubes, when that does not work the cubes stay stuck inside.

Not sure which refrigerator you have but on mine when you select cubes there is a baffle that is pulled out of the way making the opening large enough to allow full sized cubes to pass. When you select crushed the baffel is left in place forcing the ice to pass through the crushing section. My guess is they are all probably about the same. So either the baffel peice on yours is missing, electrically stuck. Hard to say for certain with out seeing it.

This answer probably comes too late for you (you posted the question 9 months ago), but I want to record it here for posterity, since I had the same problem, and searching on Google for it brought up your question.
Anyway, I managed to fix this very problem by removing an ice cube that was wedged in the ice dispensing mechanism. The way this unit works is that it pushes the ice cubes through the mechanism, which always rotates the "crushing blades". When you select "cubed" ice, a lever opens up the exit chute wider, which causes the blades to simply push out the ice cubes as they pass through. When you select "crushed" ice, the lever closes the "exit" for the ice cubes to be narrower, so that the ice cubes can't be pushed through by the blades, and instead get crushed by them. I had an ice cube wedged in there that had the same effect of closing the exit to be narrower. Removing it fixed the problem.
You might want to collect all the ice cubes that have accumulated in the ice bucket in a container, empty the ice bucket, clean out the mechanism from any obstructions, and then put the ice cubes back into the ice bucket.

What is most likely your problem is the crushed ice solenoid. This solenoid, which is located next to the auger motor behind the ice bucket, is failing to actuate when you request cubed ice. Its "home" setting is crushed, and actuates to allow cubes past the crushing mechanism in the bucket. To be certain its the problem, remove the ice bucket, and tape the door light switch in the closed position. actuate the ice dispenser lever, for both cubed and crushed ice. you will see a square hole next to the rotating fork, when you select cubes, it should open. If it does open, there is something wrong with your ice bucket, perhaps the arm is broken, or the door inside bucket is off its snap in type hinge or broken altogether. If it doesnt open, replace the solenoid

Expert Refrigerator Repair Service in Chicago and Suburbs

if it new call sears for service...with crushed ice the augar moter turn the other direction... it must not be turn the other way could be a switch in the control...

let me know for it help if NOT please let me know and I will be glad to do more in depth.

You have a solenoid switch which switches the dispenser back and forth from crushed to cube. It could be stuck or not working or the parts connecting it could be disconnected or broken. You will have to observe to see if any parts are moving and if any noise is coming from the solenoid

ice maker works. water thru the door works. lock works. light works, alarm works.
when i try to get crushed, ice cubes or quick ice.
nothing happens

You have a solenoid switch which switches the dispenser back and forth from crushed to cube. It could be stuck or not working or the parts connecting it could be disconnected or broken. You will have to observe to see if any parts are moving and if any noise is coming from the solenoid

We had thought this was a free service...??? Yes, we fixed it ourselves, after trial and error. We pulled out the ice bin and there is an arm that is moves back and forth beside it. It had frozen up. That is the ice crusher. Thaw it out and it is fixed. By the way, the above posting was not by us--ours stated that our ice crusher did not crush ice anymore. Instead, cubes came out...