Hi Keith,
I had a similar challenge with mine.
The door fits flush with the sides of the trailer, but is stopped by a piece of 1x2 trim on the inside.
The trim forms the lip the door closes against.
To solve the handle placement issue, I let the lip extend past the door cutout by an inch.
After installing the handle and interior latch, I bent a piece of heavy brass plate for the catch, so the metal latch wouldn't scratch up the wood.
I also ended up with an interior latch that does not lock.
However, after a little thinking, it was pretty easy to make it lock.
I simply drilled a 1/4" diameter hole in the latch body just below the lever, where a steel pin is inserted to "lock it".
The pin prevents the handle from being moved no matter if the exterior is locked or not.
The pin in the picture is inserted in a hole in the trim...as it is easy to keep track of there.
<img src="http://img.photobucket.com/albums/v284/1948rob/awning/doorlock.jpg?t=1173309232"><P>
No chance that a cheap locking latch will engage itself while going down the road...but be careful not to make your spouse angry...
Rob