Exterior Antique Mortise Lock Jams - Modify?

Question

Looking for (experienced?) advice on my antique mortise lock.

I bought a door with an included mortise lock in SC. The bolt bears the name "Clinton," which I believe to be a late 1800s lock company from Seneca, SC (been a few years since I did this research)

I cleaned and graphited the lock about 3 years ago, and it's remained in a fair operating state since then. Here's how it functions: Interior - round knob. Kind of binds after opening, doesn't like to return to 0 degrees. (I haven't installed the interior face plate yet, so some of the binding may be as a result of that.) Exterior - lock functions as expected, key will open bolt and latch in a pinch. Handle is lever-type (push down on the lever with your thumb, latch releases) and works exceptionally poorly, except when it wants to.

It hasn't taken much work to determine that all the issues are related - when the handle is turned, the outside lever can't be operated and vice-versa. I had the lockset out for other maintenance and decided to crack it open and investigate why the functions were not playing nice.

At the top of this image, you can see where the two mechanisms interact.

And in this image you can see the three components of the two mechanisms.

The round piece with the square hole turns as the interior handle turns. It will push the L-shaped lever towards the bottom of the photo whether turned clockwise or counter-clockwise. The funny-shaped piece that has an E-shape in the middle is raised by the lever. As it moves up, it pushes the bottom of the L-shaped piece up, forcing the long end towards the bottom of the photo as it pivots on the fulcrum at the joint of the L.

These parts are all in working order as far as I can tell, so my questions are:

1. What is the design function of the raised nubs on the "E"? I can tell they are supposed to mesh with the piece sticking out of the round piece, but it's unclear what purpose "don't let the handle and lever be used at the same time" serves.
2. Depending on the answer to 1, would removing the center or both nubs on the E, or shaving them down so they're at a steeper angle rather than rounded, be a bad idea? I don't like the idea of defacing antiquities, but if it takes the door from "almost broken" to "works fine," I'm willing to try just about anything.
3. I spent a lot of time trying to find an appropriate forum to ask this question in. There's only one site I came across that seems relevant, but it seems to be focused on antique padlocks, rather than mortise locks. If there is a better forum to ask this, or if a referral to a locksmith with experience in mortise locks is required, I'm open to suggestions.

Thanks all in advance.

Steve

Edits: 1a: I had forgotten how the day/night function works and overlooked that while puzzling about why the E-shaped piece doesn't do what I want. 1b: This came with a round knob. I tried using a small brass "handle" that rests parallel to the ground, but the spring was not strong enough to bring it back to level and the exterior latch stayed bound up with that handle installed. Only by the grace of a mail slot was I able to get back in the house without the keys. 1c: This door was not painted when I bought it, and as a result, the mortise was unpainted. The mortise was bent slightly and not lustrous, so I took the time to sand and brass wool it into shine, clear-coated the face without any parts inside, then sanded any overspray off the bolt and latch holes.

Answer 1

Beautiful. The function of the E-shaped piece is related to the toggle buttons and their mechanism on the top right of the photo. They control the function of the exterior knob.

With one button pressed, the exterior knob cannot turn and the latch must be opened with the key or with the interior knob. With the other button pressed, the door can be opened from outside unless it has been deadlocked with the key. The E-shaped piece is part of that mechanism. The chunky square block attached to it is how the exterior knob operates the latch, unless disabled. Here's a video showing how. You should watch the whole 4-part series.

Re binding:

• Replace the latch coil spring. It doesn't look in great condition. Maybe also the spring hidden behind the "L" shaped piece, you can see a bit of it at the top left of the main photo. The coil spring can be easily sourced if you know its specs (which you of course do not). The other one probably needs to come from or be made by a locksmith.
• Remove paint from the latch and its faceplate.
• Do a better job at removing rust and preventing rust from the moving parts.