With the door open inside knob will not turn unless the key is inserted. with the door closed the key will turn the bolt to the locked position but I cant remove the key without unlocking the bolt.
You have the lever that goes from the key cylinder part of the lock through the striker portion of the locking assembly turned part way, either in the wrong direction or not turned enough in the right direction so if you take the inside portion of the lock off and pull the outside portion out of the door and rotate the lever to its proper position and then put if all back together in the correct sequence it should work properly.
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