The key may not be making good contact with the ring of the key reader. Some info below:
CIRCUIT DESCRIPTION
The theft deterrent system can be armed by pressing the lock button on the remote coded key when the driver’s door is closed or passively armed automatically by the BCM 30 seconds after the ignition is switched off. When the system is armed, the Powertrain Control Module (PCM)(V6 and V6 supercharged engine) or Powertrain Interface Module (PIM)(GEN III V8 engine) prevents the engine from starting.
The theft deterrent system can be disarmed in two ways:-
1. By pressing the unlock button on the remote coded key. This will unlock doors, turn the interior light on and disarm the system for 30 seconds.
2. By inserting the remote coded key into the ignition switch cylinder and turning the ignition to the ON position.
This causes the BCM to read a security code serial data output from the remote coded key contact pin, via the remote coded key reader assembly. Should the system not disarm (theft deterrent LED off) when the ignition switch is turned to the ON position (ie. due to a misaligned or faulty remote coded key reader or faulty remote coded key), then press the lock or unlock button on the remote key to disarm the theft deterrent system. The remote coded key is powered by it’s own internal battery. If the battery fails, the remote coded key can be powered by the remote coded key reader once the key is inserted into the ignition cylinder and turned to either the ON or START positions.
When pressing the lock button on the remote coded key to arm the system, the indicators will flash once and the theft deterrent alert indicator (LED) will begin to flash.
When pressing the unlock button on the remote coded key to disarm the system, the indicators will flash twice and the theft deterrent alert indicator (LED) will go out.
On vehicles with V6 and V6 supercharged engines, when the ignition switch is turned to the ON position, the BCM polls the PCM and sends an encrypted BCM/Key security code (The security code is received via the BCM slip ring or remote receiver in the event of no slip ring communication). The PCM compares the received security code with it’s stored security code and if the codes match, the PCM will enable injector fuelling and continue engine cranking. The PCM will return an OK TO START message, which tells the BCM to jump from SHORT LOOP mode to the LONG LOOP mode.
On vehicles with GEN III V8 engines, when the ignition switch is turned to the ON position, the BCM polls the PIM and sends an encrypted BCM/Key security code (The security code is received via the BCM slip ring or remote receiver in the event of no slip ring communication). The PIM compares the received security code with it’s stored security code and if the codes match, the PIM will continue engine cranking and send a separate encrypted security code to the PCM. The PCM compares this code with its stored security code and if the codes match, the PCM will enable injector fuelling to continue. The PIM will return an OK TO START message, which tells the BCM to jump from SHORT LOOP mode to the LONG LOOP mode.