EVERY ignition switch on EVERY W124 eventually fails in this manner.

Get a new ignition switch keyed to your car from dealer or from your favorite independent who will get it from a dealer.

This has nothing to do with steering components.

If you turn the key really hard, moving the wheel a bit to relieve pressure on the lock, you may get switch to turn. Then don't turn it back to postion allowing key removal but instead get the car to someone who can repair it, i.e. has th special tool required to remove the lock mechanism.

BTDT

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Kent Christensen
Albuquerque
'07 GL320CDI, '10 CL550. '01 Porsche Boxster
Two BMW motorcycles