So my interior door handle works fine with the panel off. But as soon as i put the panel back on it wont open the door. Exterior handle is fine. Drivin me nutz...what am i missing?

I have seen the wrong surround inhibit the opening of the door.

The screw may be the problem

Wrong surround screw. It's only about 4mm long.

I recently tore down and "rebuilt" two doors to clean and refurb latches and interior and exterior door handles and I'm finishing up another on the other 914.
1. You may need to adjust the striker plate to allow for the thickness of the panel.
2. Make sure the rod between the inner handle/lock lever and the latch are secure at both ends and both black guides are in their holes between the locks. Without those, the rod will bow outward to the back of the panel; especially if the latch itself is gummed up. I had them easily operating with fingertip control in a sink prior to install.

If you switch the window winder screw and the latch escutcheon screw, you can't open the door from the inside.

It can take an awful lot of head scratching (and lots of cussing!) to figure that one out.

--DD

Sorry to say but its not that hard,biggest issue will be your latches they stuck up and cause extra load on the handle then it breaks.
Its not just a 914 problem the mk2 and other early VW golfs have the same issue ,remove the latch and clean it right out,lube with WD or similar and you will be golden.

Wd 40 is NOT a lubricant. Wd stands for "water displacement".

Check the little screw that holds the plastic piece around the inside handle.
If the screw is too long, the handle will not work. I beat my head up against this same issue before too.

That was it guys! Thank you to all special high five to my buddy Noel in the OC...hard to believe a small thing like that could do it....the screw was just an itsy bitsy too long..
.love that German engineering back on the road baby