Keep trying with the key instead of drilling or cutting, you may eventually get it to turn. It's the wafers in the tumbler sticking due to dirt and grime. Jiggle the key back and forth and use WD-40 to rinse out the dirt. In my 240D, took me 30 minutes of that and it turned finally.

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85 300D turbo pristine w 157k when purchased 167,870 July 2025
83 300 D turbo 297K runs great. SOLD!
83 240D 4 spd manual- parted out then junked