Hi Folks....I was having problems over the last week with my ignition as well...
Trouble getting the key in and out of the system (getting more difficult each time) and finally the engine would not even start, and all the lights in the display would flicker/light-up etc....
I just exchanged the ignition electrical switch (for 35$) and everything is back in perfect working order. Beware if you are told that the entire ignition (mechanical + electrical assembly) systems needs to be replaced. Given the small expense and level of effort in changing the part, there's absolutely no need to change the entire unit (and there's still potentially plenty of life remaining on the mechanical counterpart of the unit).
I simply followed Pedro's DIY procedure and it worked like a charm (thanks, Pedro!!):
http://www.pedrosgarage.com/Site_3/Replace_Ignition_Switch.html
Cheers,
Humberto-
997-Boxster, Gemballa Competition Corsa Wheels, Gemballa air intake scoops, Mulsanne bumper