Frame out to almost exact size with 2x4's.

Extend the casing with some nice 1" pine to fit to the outside. If you
set the door to one wall, then you will have to extend only on one
side. Check the thickness of the casing first, as this may influence
how you do the 2x4s

Hang the door, shimming as necessary for a good fit, etc. You can get
small bundles of shingles at the Borg for this.

Patch the dry wall. Also, depending on what moulding is on the door,
this might cover up most of the dry wall patch work.