Recall on Ford Ignition switches:
Some of the symptoms of ignition switch problems are things that don’t work or are intermittent like radio, turn signals, wipers or heater.
There was a FREE recall on Ford ignition switches. They overheat and sometimes catch fire. That burns up the steering column and sometimes the car interior. Since this is very old information, you may not be able to get the switch replaced for free anymore. The auto parts stores sell the switches for $13-$15.
Saleen0679 was nice enough to dig this up for us awhile back: Replace a 1979-1993 Ignition Switch Assembly
Replacing the lock cylinder assembly
I'm doing this by memory and it's been a long time since I did it last...
This little trick enables you to just replace the lock cylinder. There may be more problems you'll uncover if you take the plastic covers off the steering wheel.
First, disconnect the battery negative terminal from the battery.
Notice that there is a small hole in the insert that holds the key. Make sure that the front wheels are lined up straight and that they aren't causing the lock cylinder to bind so that you can't easily turn the key On. Stick a paper in the hole in the lock cylinder. Insert the key and twist it towards the Start position while pressing on the paper clip. It should go past Start and then you can grab the two lock ears and pull the lock cylinder out.
Your local auto parts store will have the replacement lock cylinder assembly if you can find a Parts Counter Whiz that can find it...
Pop the new lock cylinder back in and twist it towards off. Reconnect the negative battery cable and you should be good to go...