I've also read that good old clay mixed with straw, like adobe bricks, is the best. Using local clays sounds right to me.
In asking about the interior, I was wondering if after it's properly chinked, inside and out, whether you would whitewash the interior. I wouldn't think true whitewash would harm the wood, as a matter of fact it was commonly used on the interior of barns, chicken coops and the like. Non-toxic to animals, I would think that if the wood was left natural on the exterior then whitewashing the interior wouldn't harm, and would greatly lighten the interior.
But I know you'll do your own research.
RCJ