When my LEM is in orbit and the chase cam is following, depending on which hemisphere the ship is at the cam rotates 180 degrees and my view is now upside down...
Hemisphere of the moon? Try parenting the camera to the LEM, that way your camera will turn with the LEM. Take a look at ye olde Castle demo by Mark in the Blitz Sample folder, it has a basic chase camera system using collisions with two pivots and should give you some ideas.