Can someone tell me how the lockout works? I suspect the bad ignition is causing the problem. Its messed up pretty bad. would that cause the car to get stuck in park?

 

possible...
you may want to check the brake switch too. do the brake lights come on when you step on the brake pedal? if not, then you have a faulty brake switch, and that also releases the shifter solenoid from park.

 

that or you have bad connections on the brake light switch