Having to shake the key to get it to turn is enough to replace the mechanism. It may not solve all of your problems. That's why I gave you the wiring diagrams to show you what other components may affect all of the problems you are having.
Here is some information on how to by-pass security. This is an accumulation of several types with links:
How to Bypass Passlock 2
The easiest way would be measure your resistance and simply put the same value resistor between your orange/black and engine side yellow, tape the yellow coming from the key side. Must be sure to be within aprox 5% of the measured value or it could cause car to fail to start with the key or the autostart.
When testing PkII you need to test the "key side" of the yellow wire not the engine side or non key side of the wire that you cut. The resistance is coming down for the key cyclinder.
the best way to bypass passlock 2
there is three wires going to your key switch one is black one is yellow and the other is orange or white cut the yellow in half and strip back the black wire ,take the yellow wire from key switch side and wrap the wire through and around the black and that should get you started
1. Remove the plastic trim from around the radio and heater controls. Do this by pulling gently on it, it is held in place by metal tabs. After it is loose, disconnect the wires to the lighter socket. Then remove the the traction control and emergency flasher light buttons from the trim by unscrewing the three screws that attach them to the back of the trim. You can now set the trim aside and let the loose wires hang out of the way.
2. Remove the radio by unscrewing the three screws that hold it in. You can use a towel to support the radio against the shifter so that you don't have to disconnect it. If you disconnect the wires to the radio, you risk triggering the radio's anti theft. You can safely disconnect the antenna wire so that it can be positioned out of the way more easily.
3. Remove the ignition keyswitch. Unscrew the two screws just above and below the ignition. I believe they are 10mm. Reach in through the hole where the radio was and wiggle the ignition out of its place and into the hole where the radio was as best as you can. As you can see in the pics later, it won't come out very far. Maybe someone else can post regarding how to get it to come out further. I didn't want to disconnect anything. The goal is to get to the wires related to the Passlock II.
4. Find the three Passlock II wires. These wires come out of the top of the ignition. They are in a black anti friction sheath. They are small wires, maybe 20 or 22 gauge. Maneuver the bundled wires where you can access them through the hole the radio usually lives in.
5. Remove the sheath. I used a razor blade. An X-Acto knife would be ideal. Very carefully cut the sheath back without nicking the wires. You don't need to cut it off, just separate it so that you can pull it back. You should be able to see three wires:
black, yellow, white. You will be working with the black and yellow wires only.
6. Disconnect the batteries. .
7. Cut the yellow wire. Leave enough coming out of the ignition that you can get to it later or reattach it if you ever want to. Leave enough coming from the car that you can solder to it. Strip back both ends of the yellow wire about 1/4".
8. Strip about 1/4" of the insulation off of the black wire. Do this in a place where you will be able to solder to it later. Again, use the razor. Take small bites out of it, like you were peeling a banana. Do not cut the black wire.
9. Make sure that none of the bare wires are touching each other or bare metal and reconnect the battery.
10. Following the multimeter's instructions, connect one lead to the black wire. Connect the other lead to the half of the yellow wire that is attached to the ignition (not the half going to the car). It will be much easier if you have alligator clip leads for your meter. Insert your key and turn it to run but do not start the car. I did not get any reading at this point. Try to start the car. It should turn over and run for a second but then die. Read the value on the meter. I got 2450 every time I tried it. Your car will likely have a different value, so you have to measure it.
11. Disconnect the battery and the meter. Make sure the wires are not touching.
12. Use a combination of resistors to come up with a value as close to the value you read as possible. I used a 2700 and a 27000 in parallel to get 2400 or so. I have read online that anything within*****is ok, but I don't know. There are some useful calculators online to help you figure out which resistors to use. You do not add the values of the resistors to get the final value.
13. Twist the ends of the resistors together so that they are connected in parallel. Use test leads (wires with alligator clamps on each end) to connect one end of the resistors to the black wire and the other end to the yellow wire that goes to the car (not the yellow wire to the ignition keyswitch). Make sure that none of the wires is touching another wire or bare metal.
14. Reconnect the battery and attempt to start the car. It should start normally. If it doesn't, I would guess that you resistors are not of the proper values. Mine started, so I didn't get into troubleshooting.
15. Disconnect the battery and the test leads.
16. Solder 2" or so of 20 gauge (or so) wire onto either end of your resistors. Make sure the joints are very secure. If a resistor or wire becomes disconnected Your car will not start.
17. Tape off the yellow wire coming from the keyswitch. This wire is no longer used.
18. Slide shrink tubing over the yellow wire coming from the car. Solder one of the wires attached to the resistors to the yellow wire coming from the car. Slide the shrink tube over the joint and shrink it.
19. Solder the other wire that is attached to the resistors to the stripped area of the black wire. Using good quality electrical tape (3M), tape this joint so that it is insulated and so that the tape supports the solder joint.
20. Reconnect the battery and try to start the car. It should start.
21. Slide the anti friction sheath back down over the wires if possible. Otherwise you can use electrical tape to stand in for the sheath. Move the ignition keyswitch back into place, positioning the new wires so that they don't touch anything that will cut them.
22. Put everything else back together.
I didn't take pictures of every step, but I will try to post what I have. If you have any experience bypassing the Passlock, I would like to hear about it. So far its been a day and the fix is still working. If my car starts for a month straight without making me wait 10 minutes, I'll consider it a success.
By pass Kit from crime stopper http://www.smart-shop.com/car--mobile/radar-detectors/passkey-3-and-passlock-i-and-ii-bypass-kit-from-cr.html