Mercedes ignition swich barrel dropped cannot move pin

It sounds like you need to replace the (electric)ignition switch. When they go bad you will usually hear a crunch sound, they can be so bad as to overheat and cause other issues.

There's probably nothing wrong with the OEM key/barrel.

could try smear of molly grease on key in and out a few times
and rock steering wheel

if a key fob check battery in key

could be a worn key or a worn ignition barrel
or steering lock pin assembly below the barrel needs replacing

The steering lock/ignition assembly is an armored item made of tool steel. To replace the barrel you will need to put the ignition key in position II and you will see a small hole in the silver surround . Inserting a thin pin into this hole pushes the catch aside and allows the key barrel to be extracted.

If there is no tiny hole on the face plate of the barrel you will need Mercedes to install your new barrel as it takes a special workshop tool to unscrew the key face plate.

if the barrel is removed on the inside is the steering lock pin use small screwdriver to push it down while slightly moving the steering wheel until it goes down and stays down then you will be able to put in the barrel

If the key does not turn at all in the ignition tumbler then your going to need to drill a hole in the side of the steering lock in order to manually release the steering lock and remove it complete with the ignition tumbler attached. If you get a new steering lock you can examine it to see exactly where to drill the hole and how to manually release it. If the key does turn at least to position 1 then all you need is the removal pins that slide into the small holes around the face of the tumbler. If there are no holes then once the key is in position 1 all you have to do is turn the tumbler housing to the left until is unscrews. Let me know if you need any further assistance on the removal if the key is stuck.

Could be one of 2 problems: Steering torque lock is stuck, try pulling steering wheel in both directions while trying to turn key.
OR
The barrel of the ignition key is damaged/worn out. I have changed the barrel on my Merc and it is a real headache. Would recommend a locksmith to do it. If you want to do it yourself,

1) Remove all facia covers starting with the 2 small screws at the hand break release and work your way towards center of car.
2) When lock is visible, you will see a locking pin on the steering lock shaft (this pin is titanium and cannot be drilled out). A slot needs to be cut from the pin to the edge of the steering lock shaft.
3) Remove gear lock cable from switch.
4) Remove lock from steering column (brute force is needed!)
5) With heated screw driver (small Phillips) push holes through square profiles (3x) at the back of the switch, wiring side, and remove screws to expose wiring switch; N.B. align key-way before removing switch box, otherwise you will need an auto electrician to re-wire.
6) Take metal part of switch to a locksmith to locate circlips that secure the barrel in the switch. Slots have to be cut into the black surround which is titanium and cannot be drilled. (This part of the job you cannot do yourself without specialist tools.) Remove barrel.
7) Purchase new barrel from MB Dealer with new key, and repeat the above procedure in reverse.
8) As I said - take it to a locksmith!

Good luck! It took me and the locksmith 3 days!

Try pressing the key down little bit while you are trying to turn it towards ignition, at the same time slowly turning the steering wheel clockwise and counter clockwise ( it's locked but it still moves a little bit), it should release the steering wheel lock. hope it helps
p.s please rate the answer if you found it helpful, i need it for my ratings, thanks!

take the pannelling off around steering wheel inset a screw driver in key slot brekaway barrel to release steering lock pin then at other end of barrel take out scre and pull on wiring harness to expose a plastic barrel that will allow you to start car with a screw driver ect and you would not have steering lock as pin has been removed

Remove steering column shroud(cover)and tap ignition barrel with small hammer while twisting key backwards and forwards,also turn steering wheel backwards and forwards sometimes this is enough to release key as the locking pins in barrel and the steering lock pin do sometimes jam.You will have to remove steering column shroud to replace ignition barrel if tapping/hitting it doesnt work anyway so its not a wasted effort.Good luck,let me know how it works out