Here's a design with a front similar to the top: it lifts up and incorporates side walls. This should take care of leakage concerns everywhere but at the top hinge, which should be solvable.
The front lifts up, and yes the sides swing below floorl evel, but that's OK. When lifted (and held up by struts), the floor drops down, then the front wall drops into place, and the futon is unfolded. Presto!
No details worked out, it's just a "YAFT" (Yet Another Folding Trailer) concept sketch...