interior window frame trim

This is just a construction technique question:

A friend of mine had faux wood panel walls in his living room that he ripped out and had re-sheetrocked. We're planning on replacing the trim around the windows next week, but a problem was just brought to my attention:

The window frame now sticks out about 1/8 to 1/2 from the now finished and painted walls. I assume that when originally installed, the folks just bent the wood panels to cover the gap. So what should I do to correct the situation? I can't cut the frame because I wouldn't be able to get a straight enough edge. The only thing I can think to do is somehow shim behind the trim, and then trim the gap between the wall and the new trim. But this'll be ugly.

To further complicate things, my friend wants to use mahagany rather than stock trim and keep it stained.

Any help at all would be much appreciated...

Adam

I would ask at the garden web remodeling forum, and explain that you'd like a clean, modern look as a solution: http://ths.gardenweb.com/forums/remodel/

You could plane it down. I did that to a window by hand, but it was a pain (I'd use a power hand planer).

Otherwise, your suggestion to trim the 'gap' should work. I redid our bath and had the same issue, as the old plaster was much thicker than the new sheet rock. We just got the trim and then long shims to put on the 'gapped' side.

Thanks for you help. A furniture designer/maker is going to come out and help us out and has a solution that might work that's too cumbersome to explain without photos.. I'll post them when we're done.