We analyze the distribution of secure keys using quantum cryptography based on the continuous variable degree of freedom of entangled photon pairs. We derive the information capacity of a scheme based on the spatial entanglement of photons from a realistic source, and show that the standard measures of security known for quadrature-based continuous variable quantum cryptography (CV-QKD) are inadequate. A specific simple eavesdropping attack is analyzed to illuminate how secret information may be distilled well beyond the bounds of the usual CV-QKD measures.