Ok update today, Saturday. I traced the problem, and it does not seem to be an electrical problem.
I removed two solenoids from outside the barrel housing. One solenoid is metal, and the other is plastic, which i think is some kind of switch to tell the door control module that there is still a key in the ignition when the engine is off, so that you cant lock the doors with the key in. The metal solenoid is the one to lock the key barrel ,to disallow the key to be moved to the lock position and remove the key. Once the transmission is put in park, the switch under the shifter send a signal to the solenoid at the barrel to release, so that a spring loaded lever outside the barrel will release the cam behind the barrel, then by pressing that black button I can turn from ACC to LOCK, which allows me to remove the key.
I removed the metal solenoid on the barrel, yet I still couldnt turn from ACC to LOCK. So I knew this was a mechanical problem, not electrical, as with battery disconnected, I could easily push the solenoid plunger with no effort at all. At first thought it must be the barrel tumblers jammed up. So I removed the whole lock cylinder from the steering column, by keeping the key in ACC and pressing in a slide pin above it, pulled it out easy.
Turned the key from ACC to LOCK, and it just turned with no problems. Pulled out the key, VOILA.
Since the cylinder is out, I gave the slot a good spray of SUPER LUBE dry lubricant.
I took a close look at the outer housing that holds the lock cylinder, and I conclude the problem can only come from the spring release lever mechanism. The spring is 32 years old, but when installed correctly, it feels more than strong enough to push the lever to release the cam, so that I could turn the key from ACC to LOCK. So what happened? Why did it jam up?
There can only be 1 cause :, the spring must came off from a small protrusion which acts as a guide on the lever. If this ball pen sized spring slipped off this guide, it basically has no force to push this lever to release the cam behind the cylinder, so the cylinder will stay stuck in ACC, and will only allow movement from ACC ,ON and START.
I proceed to grease up the hinge point on this lever with SUPER LUBE with syncolon, but wipe dry the area where the spring sits, I want the spring to not slip off the guide.
I put everything back together, with battery still disconnected, the key can now be turned to LOCK, and removed by pressing the release button.
I decide to take apart the shifter and clean and relube the switch for the PARK signal, and also change the bushings on the shifter since there is so much slop in the shifter. I will be putting everything back on the car tomorrow. Hopefully the problem is solved.
I will be making a video on what I did and will post it the coming week, if the fix is sucessful.