Hi folks,
       For those that have been fighting this issue, I fixed it today and
thought I would share the process. This car has 141K on it so these kind of
things are normal.  In the shifter, there is a button that is activated by
the button on the side of the shift knob.  I removed the shift knob and the
plastic cover that snaps over the shifter.  Remove the screws that hold the
larger plastic cover.  This cover is held in place by 4 screws....two of
which are under the drink holder.  Now remove the shifter gear indicating
plastic piece.  It takes 4 screws to remove it and takes a little patience
to get it out.  There is a pin that fits through a hole on the button shaft.
This pin closes contacts on a microswitch when the shifter is in Park.  This
in turn, releases the lock cylinder so the key can be withdrawn.  The pin on
my Impreza had managed to work its way out so it no longer made contact with
the microswitch and release the key.

A little JB weld on the button shaft plastic piece (which was cracked) that
the pin fits through did the trick and secured the pin.  Seems to be quite
secure.

Regards,
Jim, Redmond