Steering locking mechanism problem - how I resolved it.
 

After spending many hours under, over and around my 2000 blue Boxster to change the clutch disk and check on the IMS bearing I finally got to the point where I could do my first test start.
Key in the ignition… turned it… and it would not go even to the first position. Previously the key was hard to turn after not being used for awhile, but I was always able to get it to move with moderate force.

Here is what I went through to resolve this.
1) It seems sometimes it is the electrical switch on the bottom end of the mechanism that causes this symptom so I first removed the electrical switch… key would still not turn. I installed a brand new switch… key would still not turn.
2) So my attention turned to the lock cylinder that the key fits in, I convinced myself that it was broken and that was why it ould not turn. I tried to follow the instructions to lift out the lock cylinder by turning the key to the first position and sliding the end of a large paper clip through the hole* beside the key slot. After hours of wiggling and jiggling there was no way the paper clip was going to go in far enough to release the lock cylinder. I deduced that the key was not turning quite enough to allow the paper clip to slide all the way down.
3) So I decided to remove the whole locking mechanism. At this point I found a reasonably priced replacement mechanism (including key, electrical switch and barrel) on eBay and I ordered it. After removing all sorts of parts including the instrument panel, the steering wheel and various panels I got to where I could remove the mechanism as one unit. Removed the bolt and then there is a little spring loaded pin that one depresses and the unit slips out. Unfortunately there was no way that little pin was going to move. After more time wiggling and jiggling and forcing I gave up and got out my Dremel like tool and cut a piece out of the bracket that holds this piece so the pin would slide out without being depressed. Once out, I saw that the bolt that slides into the steering column to lock it was extended. Hmmm. I could not push it in, but with a hammer I tapped it back. At this point I was able to depress the spring loaded pin.
This is my old unit... the bolt is extended, right side.
http://986forum.com/forums/uploads02...1558319811.jpg

You can see the spring loaded pin above the bolt hole... and marks left by the Dremel.
http://986forum.com/forums/uploads02...1558319988.jpg

So my problem was that due to a lack of lubrication the bolt was getting more and more difficult to move using the key, finally it jammed in the extended position. Turning the key to the first position pulls the bolt back so the jammed bolt prevented the key from turning. Since the key must be at the first position or a little more to insert the paper clip, the lock cylinder could not be removed. And given that the little spring loaded pin that holds the mechanism in the steering shaft bracket can only be depressed when the bolt is not extended the only manner to get it out was to cut a path for the pin.

Once on the bench I oiled the bolt and now the key turns to extend and pull back the bolt normally.

* Note - I have seen pictures of this hole both at the 1 o’clock position and the 7 o’clock position. Once you have it apart you will realize it can be installed in either position (i.e. rotated 180 degrees).

I came across this thread which is similar to mine.
http://986forum.com/forums/561000-post63.html
In this thread 78F350 was replacing the tumbler and the whole locking mechanism so didn't mind destroying the tumbler and the lock mechanism to be able remove them.
In my case I did not want to destroy the tumbler, I just needed to unjam the locking bolt, so I dremeled out the part of the mount that captures the little pin.
Pick your poison.
If I had known in advance what my problem was I could have repaired it without it costing a cent.

I might be a little slow here... can you lube that bolt without taking anything apart?

Short story:
Wife took 2001 986 for a short trip. Its new to us, about 2-3 weeks. On the way back she said the key didn't turn. A few times it got the radio on, but then wouldn't go further. It took 7-8 tries and she got it fired up.

After she got home, she tried again, no issue. Thats when she told me and I ordered a new OEM Ignition (~$35). Should be here in 4 days.

Since then, using my key, I have driven 3 or 4 times without issues. Tried her key and no issues as well.

So is it the ignition that needs to be replaced? Her key? Or what?

"CND" - Could Not Duplicate, something I hate!!!

Any help would be appreciated!

I had a similar problem so I removed the entire mechanism then flushed it repeatedly with kerosene. then put a few drops of light oil in it.
No problems for two year now.

I wasn't able to, I tried removing the lock barrel and squirting oil down the resulting hole hoping it would make it's way to the l steering lock bolt... no difference. So I took the whole thing apart, steering wheel, part of the dash etc. A little oil in the right place solved the problem so all it cost me was my labour... except that I had already bought a new lock mechanism.

I looked at my spare locking mechanism today to help someone who is having problems. The bolt, that extended instantly when I cleaned and oiled it a couple of years ago, is now very slow. I lubricated it with lithium grease and with the low temperature in my garage it would seem that that is the culprit.

https://www.youtube.com/watch?v=0ioNF7RDTBk

That's slow, but at least it moves. Probably needs a good cleaning with kerosine/Jet Fuel/Brake or Carb Cleaner, then either a graphite lubricant or light oil as Blue62 said.

With my most recent project without a key, I didn't waste time fiddling around with the button. I removed the steering wheel and trim, then hit it for a few seconds with a Sawzall. In the case of replacing the whole lock mechanism, I recommend it.

http://986forum.com/forums/uploads02/lock1639793252.jpg

Not possible to drill little hole near the lock bolt then insert a straw and clean -lubricate this thing

That is a possibility, now that I know how it works. There is another way to lubricate it via the steel blocking plate at the other (left) end of the bolt.