If you are willing to give up the armored cable, you can just get a new ignition switch. Your neighborhood auto parts store will have a universal ignition switch that will work perfectly for about $15. The ignition switch has a limited lifetime, and it sounds like yours is at its end. If you get a new one, just make sure it springs back to on from the start position and a turn the other way accessory position. You will get a new key, but that's ok, the ignition key is not supposed to match the door keys anyway. Most old volvos have had to dump the armored cable at some time or other, either because of the switch dying or as a result of an electronic ignition installation.
Tom