Suddenly, key won't turn any further than from 'O' to 'I'. When in 'I' wheel is unlocked and I can turn from side to side. I cannot budge the shifter. Question right now is whether disconnecting the linkage will allow shifter to move, possible freeing up "chain" running from shifter to ignition. I have a feeling that this problem is not worth a flatbed ride to nearest dealership 2 1/2 hours away. Any suggestions appreciated.

I assume that the OP has figured this out by now, but for the benefit of others ...
I had this problem with my '02 V70. Since the car was parked nose in to a curb, the first problem was getting the car on the flatbed with the front wheels locked in park. Fortunately, with one person jiggling the key and the steering wheel and a second person doing the same with the shift lever, we somehow got the trans into neutral.

As far as the basic problem, it's apparantly caused by a failure of the chip in the ignition lock. The chip/lock unit had to be ordered from the factory and replaced. I assume the key fobs had to be reprogrammed also. Mine was under warranty (2years/ 42K), so I don't know how much this costs.

Thankfully you can turn the wheel! Did you try pushing the key up before you turn it? Of course you did. I don't believe the shift-interlock will help you, it sounds more like the keylock is the problem.

Klaus
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(1975 164, 1995 854T, 1998 V70R)

Wouldn't your '03 still be under warranty? Or, did you drive to many miles already for that? If under warranty, let the dealer hassle with this issue.
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1998 S70 T5 Emarald Green Metallic, 2004 V70 2.5T Ruby Red, Previous Owner of Black '94 850 Turbo Wagon. My cars have been running so well lately they've got me worried.

It would be except for the mileage - 67,000.