I'm not sure if the setup on a W123 is the same as W126 or as on my W107 560SL, but I recently pulled the cylinder/tumbler out of the lock button on my SL to put on a stainless cap/cover.
From some advice here, and playing around with it, I found that you need the key inserted to turn the cylinder inside enough to pull the tumbler out of the button. From there, you can change the 'pins' (or whatever they are called, the sliding pieces that the cuts in the key push on) from one tumbler to another so the donor lock can be used with the ignition or other key.
So, if your junkyard lock came with a key, you could remove the tumbler, but then you'd need a donor tumbler with pins/sliding things that are matched to your ignition key. That could be from one of the doors, since I'll assume the key your locksmith made will also fit the doors...but you'd still be short 1 tumbler. It looks like the locksmith for this job....
Edit: Here's the link to the thread I did on removing the cylinder tumbler. Might help a bit....
Trunk lock button tumbler repair 560SL