Another forum member mentioned the use of a $30 dremmel dimond coated grinding disk. He was talking about a 126 but the process should be similar for a 123.
126 frozen steering lock/tumbler removal (fairly easy, but long)
I think you can grind the pin out without doing too much damage to the collar that it seats in.
Once you've got the whole assembly loose though you may find that you still can't turn the key. Once you've got it free try pushing in on the steering wheel lock (See
http://garnet.acns.fsu.edu/~jjs5772/W123 for an in progress FAQ/Guide to ignition problems). If the ignition assembly itself is the problem and not the tumbler you may be able to turn the key and remove the tumbler.