There is a tech service bulletin it sstatets tolube the lock cylinder. If this does not work ignition cylinder replacement would be required
Bulletin No.: 06-02-35-016C
Date: October 02, 2007
This bulletin is being revised to update the lubrication information by adding steps and photos. Please discard Corporate Bulletin Number 06-02-35-016B (Section 02 - Steering Wheel and Column).
Some customers may comment that the ignition lock cylinder intermittently sticks or binds.
A lack of lubrication may cause adjoining metal surfaces to wear, resulting in a significant amount of powder (black in color) to form in the ignition cylinder case housing.
If the following lubrication procedure was already performed on this vehicle, contact Technical Assistance (TAC).
Remove the ignition lock cylinder, clean the ignition lock cylinder and case housing. Then lubricate the ignition lock cylinder tip and case using the procedure below.
You must use two different GM lubricants as outlined in this procedure.
Remove the battery cover and disconnect the negative battery cable.
Remove the ignition lock cylinder. Refer to Ignition Lock Cylinder Replacement in SI.
Use a shop cloth wrapped around a screwdriver to aid in cleaning the inside of the ignition case housing (1).
Wet a shop cloth with GM Brake Cleaner, P/N 12378392 (in Canada, 88901247), or equivalent and wipe out the inside of the ignition cylinder case housing (1).
The actuator blade inside the ignition cylinder case housing must be in the ACC position in order to install the ignition lock cylinder as shown in the above illustration.
Inspect the position of the actuator blade inside the ignition cylinder case housing. If the actuator blade rotated when cleaning the ignition cylinder case housing, then reposition the actuator blade to the ACC position using needle nose pliers.
Wet a shop cloth with GM Brake Cleaner, P/N 12378392 (in Canada, 88901247), or equivalent and clean the outside case (1) and the tip (2) of the ignition lock cylinder.
Use the tube of GM Super Lube(R) with PTF, P/N 12371287 for U.S. (10953437 in Canada) as shown in the above illustration.
Lightly coat the tail end (1), the two tabs (2), and the shaft of the ignition lock cylinder with GM Super Lube(R) with PTFE, P/N 12371287 for U.S. (10953437 in Canada).
Lightly coat the entire outside case (1) of the ignition lock cylinder with GM Multi-Purpose Lubricant, P/N 89021668 for U.S. (89021674 in Canada).
The ignition key must be installed in the ignition lock cylinder before installing the cylinder into the housing.
Install the ignition lock cylinder assembly into the ignition cylinder case housing. Refer to Ignition Lock Cylinder Replacement in SI.
Connect the negative battery cable and install the battery cover.
Verify that the customer's condition is fixed.
For vehicles repaired under warranty, use the table.
Then the key cylinder is internally broken and would require replacement
INSTALLATION IMPORTANT: Actuator blade within ignition module housing must be in ACC position to install lock cylinder assembly. If rotated, replace it to ACC position, using needle nose pliers.