This definitely sounds like your cord is bad. The reason that I specifically think that it's your cord is because the cord is actually connected into the handle, and is attached to the handle in the back. This would make sense why the machine was cutting off every time the handle was moved.
Also the cords are notorious on Kirby's for going bad, and are usually the only thing that goes bad on a constant basis.
Here's how you can check to see if your cord is bad or not:
Greetings from GoVacuum.com,
Unfortunately there is no fuse on a Kirby Generation model. In my 10 years of repairing Kirby's as well as other vacuums
I will tell you that 9 times out of 10, when a Kirby Generation doesn't turn on, it's the cord that needs to be replaced. This is by far the most common problem that we see on Kirby repairs.
The Kirby motor is very well built, and usually has a life of 30+ years (G3 is about 12-15 years now). The only other problem it could be on the Kirby would be carbon brushes, or the switch assembly.
I would first try testing the power cord, I think this will solve the problem for you. To test a cord on a Kirby Generation (all Generation models are the same machines, just different colors) first follow where the cord goes into the Kirby at the bottom. To access this cover easier, first remove the "boot" at the bottom of the outer bag. This is the plastic part at the bottom of the outer bag that connects onto the Kirby. You will see that there is a plastic cover over the cord. You will need to remove the screw that holds this cover on.
Now after you have removed the cover, pull the plug out of the machine. Once you have the cord disconnected from the machine, you can now test it to see if there is a short somewhere in the cord. You will need to purchase an inexpensive continuity tester from Home Depot, Radio Shack
or most other electronic stores. This will tell you if there is power running through the cord, or if the cord is bad. With the continuity tester, plug the cord into the wall outlet, then put the positive, and negative testing rods into the female end of the cord that plugs into the machine. You will then be able to tell if the cord has continuity going through it. The tester will indicate if there's continuity or not.
here shows that the cord is good. If your tester does not light up, or indicate that there is continuity, you'll simply just need to purchase a new cord. As I stated earlier, this is the most common reason that a Kirby won't turn on.
If however your cord tests OK, this indicates that the machine either needs a new motor (or carbon brushes in the motor) or it needs a new switch.