"Her father finds the lamp in the basket."
Translation:Ŝia patro trovas la lampon en la korbo.
No it would mean that he found the lamp going into the basket. It's a sneaky little devil, that lamp is. For her father to have been in the basket would be more like (and I'm willing to be wrong on this) Dum en la korbo, ŝia patro trovis la lampon.
When one includes the ending ~n after a preposition (such as en, sur, al ktp) one is giving the object so tagged a direction. "En la korbo" = in(side) the basket. "en la korbon" = into the basket.