To reply to my own post - some feedback
with a vice-grip and a LOT of wiggling we (locksmith ...) managed to get the key turned to position 1.
Once the barrel was removed we discovered that two items broke:
- the pin towards the steering lock broke off right at the base of the key mechanism (not too common the locksmith said ...)
- the front of the barrel (where the key enters) broke away from the assembly (quite common - locksmith)
I noticed that I do not get the familiar 'click' when the key was extracted when I parked the car a day ago - probably the steering lock breaking (although it did still lock the wheel).
The front part breaking caused the whole assembly to become inoperative.
Hope this info helps anyone else in the same predicament. Bottom line - $$$$