I would try jump starting the vehicle first and get idea if battery is dead before trying anything else. take battery to auto store and test if good, check battery connections are they all crusty, clean with vinegar and brush clean and reconnect. those are the first things i would check before going any farther.
SOURCE: Can I bypass the Passlock security system?
never heard of this happening before ,sounds more like the code reader behind the steering lock is playing up.If it is then its dealer only,have a funny feeling this could be an expensive repair.Sorry i couldnt be much more help but this fancy electronic stuff is designed to stop general mechanics like myself from doing repairs.
SOURCE: 2005 S40 wont start. Message says key error?
Do you have the remote, i.e. The deadlock system is activated and deactivated using the remote control key fob, which allows the driver to open the car as they approach. It seems you have activated the steering lock which is for preventing thieves to make a getaway. Use the remote to deactivate it and then try starting the car.......sodeep
P.S. The security system is a built-in feature of this model
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