Help with my mesh please!

[MrArmless]

Hello fellow 3dt'rs,

I'm running across a little problem and I'm wondering the best solution for it. I usually manage to do complex parts with less trouble than simple ones for some reason... so I'd like to get some advice from people who are used to doing mechanical-type modeling. Here is my problem : I'm trying to make an old fashioned door lock.

My problem comes when trying to cut the hole in the holding cylinder as you will see in the next two images. I'm trying to find a way to have a clean hole in the cylinder and be able to apply a meshsmooth on top and still have it look correct.

If anyone wants to paint over my images and/or give me a few tips, it would be greatly appreciated, I've been stuck with this lack of base knowledge for too long now and I'd like to get past this!

My thanks!

Simon