The key is frozen and will not turn the ignition. The key can be removed, however it will not turn enough to allow the use of the removal tool. Can I drill the tumbler assembly and replace the tumbler without damaging other mechanisms?

have you tried rocking the steering wheel?

I had a similar issue.
I squirted a lot of graphite inside the ignition, coated the key with it.
I wiggled the steering wheel to help unlock ignition, then I kept slowly wiggling the key in the ignition, turning it back and forth, the more I did this the easier it got to unlock and turn key, you may wanna try giving it a shot, also make sure your key is not overly worn down.
good-luck.

Welcome to the forum!
Use the search function and search for "ignition cylinder removal" and you will get a lot of information.
It is worth spending some time trying to get the key to turn to the correct position. I was lucky and replaced mine while I could still turn the key.

Your lock is obviously gone.

Doing this requires a good shield and a catch basin.

I got a Volvo ignition to break over by using a combination of WD40 and Carb cleaner alternating spraying each. Amazing how much gunk came out.

The lock will still need to be replaced. A friendly reminder that for about $20 almost any locksmith can make your new ignition lock be keyed to work with your existing keys.

__________________
1985 300D 198K sold
1982 300D 202K
1989 300E 125K
1992 940T

"If you dont have time to do it safely, you dont have time to do it"

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."