Chevy dealer is a little screwed up -- too many young kids that don't
remember what an '87 was all about.  It's not a microchip, just a simple
resistor bead in the key shank.  Both keys are doing it and it's
intermittent; so, I'd go for a dirty contact in the ignition lock, loose
cable connector between the steering column and the VATs module or the
VATs itself.

-- First rule out the keys - not likely but cheap and quick - take all
keys to a professional locksmith and have him/her check the resistance
of the beads (there are about a dozen different values and the locksmith
can verify that your keys have legit resistance values.  Make a note of
whether the resistance I.D.  -- IIRC this is a single letter and it
stands for a specific resistance in ohms.  This will also let you know
if the locksmith knows anything about the VATs system in older GM cars.

-- Get a price from the locksmith on checking out the ignition switch
and wiring. Ditto, from a dealer that knows VATs.

-- Finally check the VATs.  A different dealer would be desirable, one
that has a service adviser that can pronounce VATs and not call it a
microchip sensor.  (or, one that isn't trying to 'snow' the customer!)

My wife has an 87 purchased new.  Went through 3 VATs modules when it
was new.  If the key has the wrong resistor or the VATs misreads the key
it will not allow the car to attempt to start for five minutes.  Part of
the anti-theft system.  As PJ said, find a different dealer.  Better
yet, see if you have a local non-dealer mechanic that specializes in Vettes.

Glenn

I can tell you how to circumvent the VATS for the cost of a few
resistors. If you are at all handy. Send me an email and I will explain

You guys are great.  Thanks for the information, it is exactly what I
needed!  Now I can at least approach Mr. Goodwrench with some idea of what I
am talking about, and not get the wrench put in the wrong place!

Luke