Hey Scott, only too glad to assist, if I can. I'm not so sure that the trunk latch on your SL works the same as mine though, from the problem described.
Pic01 is the position of the black plastic 'push' piece, trunk locked, either from turning the trunk key to the right, or from the attached arm pulling from the vacuum canister, as when the driver door is locked. The 'lock' position moves the black 'pushing pad' to the right (from in the trunk view) so it can't contact the latching arm when the button is depressed.
Pic02 is the unlocked position. The black push piece has moved into the center of the assembly, and is now positioned directly in front of the bottom part of the latch pivoting arm, shown in pic03. The key is turned left, or the attached arm has pushed it toward the passenger side.
In my setup, I can't visualize the same issue as you describe, but that could be me interpreting wrong. I had a devil of a time with meltedpanda's seat belt problem, internet tech is a tough communications medium....
Since the button moving inward is the 'force' that pushes on the latch arm, and this will only work if the black push piece is turned as far as shown in pic 02, I will assume you can't get the key to turn it all the way? Am I correct so far?
Edit: I don't think the tumbler can be inserted into the button housing in more than one way, so when it's in, the end, where the key inserts, is flush with the button housing and the key slot is vertical. The black plastic piece could be in the wrong position on the stub end, where the circlip holds it on (see pics), or the post/piece could be worn so it doesn't rotate properly.