Sounds like you can at least turn your key, that is good.

Here is a Diesel Giant pictorial on the switch an some good pictures. he is grinding off the lock pin which you won`t have to do.

http://www.dieselgiant.com/repairignitionlock.htm

Iam thinking your problem could be either the tumbler where it turns the lock housing, the pis are worn, or it is in the ignition switch on the rear of the lock housing.
here is a write up I did when I replaced mine. I have done this 3 times so far.
I jest replaced everything and was done with it. If you need to replace the tumbler, be sure to buy it from the dealer, and it will be the correct one for your VIN #. if you decide to pick up one for another car, you will have 2 keys, one for the door and one for the ignition. loose the ign key and there is no way to get one from the dealer as they go by vin#. something to think about.

Ignition cylinder problem...

Hope this helps.

Charlie

__________________
there were three HP ratings on the OM616...

1) Not much power
2) Even less power
3) Not nearly enough power!! 240D w/auto

Anyone that thinks a 240D is slow drives too fast.

80 240D Naturally Exasperated, 4-Spd 388k DD 150mph spedo 3:58 Diff

We are advised to NOT judge ALL Muslims by the actions of a few lunatics, but we are encouraged to judge ALL gun owners by the actions of a few lunatics. Funny how that works