Since neither inside nor outside handle will release the latch, I think the problem is likely in the lock mechanism, not the latch itself - especially when you mention that the lock button does not move over its entire travel path.
One idea sounds like something way too easy to actually work - and maybe others would know - but might it possibly free up if you shot a load of WD-40 right down the lock rod? Or maybe even give a long shot of the WD straight into the door lock keyhole. I’m thinking it just might find its way magically down to where the mech is stuck and release it. Little harm, cost, or time lost in trying that anyway.
I don’t have a ‘65, but I think a good place to start sorting it out would be to remove the door panel from the drivers door and examine very carefully what moves to make what happen. Then maybe you can figure out what part needs to be jimmied which way, and with what shape of bar or hook you could go down next to the glass in the passenger door, to get the lock mech to allow the latch mech to work again.
It’s not likely anything is broke. It probably just lost its lube and stuck in a bad position. And to make matters worse, the white lithium “grease” that was originally slathered liberally on every functioning part of the door, lock, and glass mechanisms would have certainly dried out 35 years ago into a state similar to old plaster. Scrape and clean that out wherever you can and re-lube it all with something more permanently pliable like wheel bearing grease - or even lanolin based Fluid Film which never dries out.
Hopefully you find a quick fix. Good luck with it, Ron, and let us know what finally works short of calling on your fire and rescue bud to use his Hurst Jaws of Life.
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