I have been doing some more research and working on the problem and I think I can mostly answer my own questions so I will post my own answers in case someone else has the same questions someday. I would still be interested to hear from one of the moderators to make sure I don't mislead anybody.
Number 1 - I don't think the accessory postition has anything to do with engaging the theft deterant. It sure seemed that way at first because this issue happened right after I put it in the accessory position for the first time since owning the car. I think that when I put the ignition in the accessory position I broke one the white wire connections on the back of the ignition cylinder.
Number 2 - $400 - $500 seems to be the going rate at dealers for a ignition cylinder replacement. Keep in mind that you will have to buy new keys. I was told the ingnition cylinder would be $83 and (1) key would be $42. That would be $82 for keys if you want a spare. So your looking at $160 worth of parts and $340 worth of labor. I didn't ask if key fobs had to be reprogrammed or not.
I found another post on this site that said that the ignition cylinder is not a dealer only part so I don't see why a non-dealer shop could not make the repair as long as they were able to get the new keys set up ok. I was unable to get a price from a non-dealer shop or confirm that they would do it because today being a holiday (July 4th) I could not find one open.
As for Locksmiths, I did an internet yellowpages search and first one I called said they worked with VATS keys. The guy that did the automotive was out today (holiday) but they thought that he would be able to do it. He was not able to however give me a price for what they would charge. They said that they would install the parts that I bought from the dealer.
Number 3 - I can't really answer my question on this one other than to say that I could not figure out how to get into the steering column just looking at it. Which is probably a good thing since that means it is fairly secure and keeps dumb people like me from stealing cars.
Ultimately I decided to bypass the resistor reader in the ignition cylinder. I used information found on this site and others. I measured the ohms of my key using a multimeter, went to a electronics store and purchased two resistors that added up to the total resistance ($1). I twisted them together (in series), wrapped some electrical tape around them and jammed either end of the assembly into the wiring harness above the parking brake pedal where the two white wires enter. VAROOM, car started.
I may still get it repaired but at least this allows me to move my car (it was sitting in my neighbors drive way when it broke) and drive it to the dealer instead of having a tow charge. I may also just leave it as long as it continues to work. I realize that I have just made my car easier to steal but come on... it's a 14 year old car with 154k miles with worn out driver seat foam. If you really need to steal a car THAT bad send me a PM and I'll tell you where I live.
Side note. This may be common knowledge to most, but I pulled the resistor out while the car was running just to make sure that if it came loose while I was driving that the car would not die and continue to run. Apparently the resistor is only needed during the start up process.