First things first, before poking around disconnect both battery terminals from your battery, disconnect the negative lead first then the positive lead.
The first thing that comes to mind is your ignition key lock mechanism has become faulty, but that usually requires an expensive repair to replace the whole ignition key assembly, so I'll just tell you what I usually do to repair electrical faults in cars.
http://www.ebay.com.au/itm/92-93-94-...item3f31207692
Visually Check the earth lead going to your battery on both ends of the cable, if your battery isnt getting a good conduction to earth then nothing else will work. You can remove the bolt from the chassis and clean both sides with 1200 grit wet and dry, or emery board.
If that doesn't fix it then the Corrosion must be somewhere else, this is a classic sign of corrosion happening somewhere. To remove corrosion from connectors I usually just use WD40 (it has to be genuine WD40), spray a bit of it on there and plug the connector in and out a few times to clean the terminals.
I would check and spray the connectors going to your ignition switch, as is shown in the ebay link above.
If there is corrosion on the battery terminals that can also be a bad sign that your battery is about to cark it. I would pour hot water (from a boiled kettle) onto the battery terminals to melt away any corrosion.
This is what battery corrosion looks like:
To re-connect the battery safely without large sparks, I usually always connect the positive terminal first to the battery and THEN the negative terminal second. This order in which you reconnect a battery prevents large sparks from occuring. Disconnecting a battery from the car is the reverse order.
Always maintain positive to positive (positive to red) and negative to negative (negative to black). This is called polarity. Never reverse polarity on a car battery, ever.