Tony is right in that the key switch has a vacuum switch attached to teh backend of it that has a port for vacuum (shutdown mode) and a port to bleed off vacuum (start mode). If the key is not returning to the correct spot it could be that the vacuum switch is not returning to the spot it needs to plug off the vacuum circuit and bleed whatever vacuum is there for startup.

I know nothing about the 87 but this is the way that my cars work.
I'd check that vacuum switch that it is moving to the correct position. You could do this with a mityvac by putting it on the feed line to the shutoff valve and then cycle the key after the car has built up vacuum.
When it is running the mityvac should read zero vacuum, when you turn it off the mityvac should read full vacuum (how ever much your car makes) and then when you turn the key back to the on position the vacuum in the line should disappear.

Now again I have to state that I do not know your car. Hiopefull someone who does will confirm that this method of testing will work...

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