Your handles may not be connected internally. The bar may not be inside the handle. If the key is free to turn then the cam in the Euro cylinder may be broken - i'd suggest replacing this. But, firstly strip the handles off the door and see if the bar is passing into both handles with no movement. if it is not working i'd suggest calling a locksmith out - a local one shouldn't charge too much, get a quote first, as most locksmiths don't charge a call out fee.
MYLock21, February 2013