I replaced the mechanical portion of the ignition switch in my '98 V70 (146m) yesterday. The most useful diagnostic act I performed before going this route was to separate the electrical part of the switch from the mechanical, reattach the wiring harness to it, and with a screwdriver rotate the part...

Terrence, don't beat yourself up over having the mechanical part of the ignition switch replaced. I'm convinced it was the problem. My '98 V70 had the exact same problem as shown in your very helpful video. My key would spin around several times, but when it would catch I thought switch was working ...