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I am always waiting for you to post! Very interesting...
If you have a manual transmission, there is a switch on the clutch pedal that could be at fault...
If it is an automatic, try shifting it to N before starting again...
But, you are probably correct, there is an immobilizer switch that will not allow the car to run. That ring is on the backside of the key portion of the ignition switch and has been known to wear out. I have never been there and done that, sorry.
The 1998s have "normal" old fashion keys, no memory, so the key is not your problem. Sitting in the driver's seat and locking/unlocking the doors with the remote should help sometimes and that points to the immobilizer.
Klaus
EDIT: Don't rule out the electrical portion of the ignition switch. Check it by jiggling the key to see if the warning lights flicker in pos II.
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The 164 has a new home, all I am left with are a 95 854T and a 98 V70R :)
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