From the picture it looks like the ignition has been forced into the 'accessory' position (position 1), probably with a big screwdriver.
It will almost certainly have bent the pin inside which locks the barrel in place, which is why you can't release it.
I would look for an automotive locksmith to get the barrel out. If you try and drill it yourself you will need to be extremely careful to not damage the lock housing as that is cast aluminium with the lock barrel being hardened steel.
Good luck.