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The only place for a coil spring is up Zebedee's arse
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So I've had an issue for a long time where the barrel sticks in, and you get the "ignition key in" error. I usually just tap the barrel with the key and the warning goes away.

However it seems to have gotten worse. Now I get the message even when the barrel has popped out, and no amount of poking or jiggling will fix the message.

Any ideas how to sort it? Is it likely to be the switch itself?

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Have you tried spraying some lube into the barrel?

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Spray brake cleaner into the lock and work the key in and out a few times. Keep doing that until it returns fully every time. Then, once the brake cleaner has evaporated, spray some graphite powder into the lock to lube it. Don't use anything like an oil or WD40 as dust will stick to that and it will gum up again.

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I've ordered some graphite. I've been wary of spraying anything in there as I've heard it can gum it up....

The odd part is that it's returning now, but the warning is staying on... Is it still likely to be something in the barrel sticking, or could something else be going on like a sticky switch?

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When you turn the key to the off position, the centre of the barrel should pop out by a millimetre or so and you hear the clunk from the steering lock. As it moves out, it operates a microswitch. What happens is it doesn't fully pop out so the switch doesn't operate and the steering lock doesn't engage.

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Yeah, my point being its currently in the "popped out" position, but the warning is still on!

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Does the little flap close over the keyhole? That flap is what operates the microswitch so if that is sticking that is why you are still getting the message.