I've seen a post or two about using a vibratory-type power sander on the key while it's in the ignition (not sanding, just vibrating) while trying to turn the key. If it turns, you're golden. Some other things like trying other keys or maybe a special aerosol lubricant might help.
I did a
how-to post on doing the lock cylinder of a W124 - very easy if it'll turn. If not...the 'fun' begins. In the DIY section, there's a
W201 lock cylinder removal post (should be pretty similar to the W124). Very labor intensive.
Best of luck!
