I have a 2005 Grand Am and had the same trouble a week ago. We found that our ignition mechanism has somehow become "deprogrammed" and are in the process of buying a replacement and installing it ourselves. The part is 157.00. To go to the dealer for a diagnosis we were told the fee just for the diagnostic was 175.00! So we opted to do it ourselves (with advice and help from this forum - of course...)
You may find the thread on my issue to be helpful in your case as well. Check it out under the title "2005 Pontiac Grand Am Key will not turn" or the link below may be easier.
https://www.2carpros.com/forum/ignition-steering-wheel-locking-mechanism-etc-vp434696.html
We should have everything replaced, repaired and reinstalled by tomorrow night and I plan to post our final outcome and feedback on how things turn out.
Good Luck!
Julie Olea
Upland, California
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Saturday, January 3rd, 2009 AT 9:24 PM