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Panama is so skinny, it seemed like Nicaragua would be much more difficult to cut through, but spending a couple minutes in Google Earth shows it actually wouldn't be so bad.
You'd want to cut a canal to Lake Nicaragaua. It's 12 miles from the Pacific to Lake Nicaragua, and you have to use locks to get up over a 1,200 foot mountain range and back down again to the lake. I'd guess about 50 locks total there. The lake is something like 100 feet elevation, and is about 30 miles from the Atlantic. But there is this nice wide meandering river that could be dredged. With a couple locks put in around rapids where it drops the 100 feet to the sea, it's really pretty doable. It is nowhere near as bad a location as I first suspected.
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