Follow this thread including the link to Mike Fokle's site on how to fix the ignition switch.
http://986forum.com/forums/showthread.php?t=17456&highlight=ignition+switch
A bad ignition switch will have the symptoms that you described regardless of getting the key in / out of the slot.
Good luck,
-Steve
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2001 Boxster S
Desnorkled
Pioneer Avic D3
JL Audio 6.5 inch subs (in the door)
Pyramid 4 channel amp
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