Hey Eric..I asked the mechanics in the family about your issue and was told the following..first, try cleaning off the chip on the key with alcohol (most likely not the issue and also assuming you have more than 1 key and have tried them both).
Next, any GM dealership can put the key inside of their key machine (thingy, no idea what it is called) and they will know immediately if it is or isn't sending the proper signal.
You mentioned the alarm having been disconnected at one point as a possible solution to the issue back when your Dad first found the problem. Was the alarm an aftermarket alarm, or did it come in the car when it was new? Sometimes they are not disconnected properly and can cause issues similar to the one you currently have.
The issue could also be as simple as the ignition switch.
If the key is ok, and the alarm was properly disconnected, then the issue could be the computer the key 'talks' to. A GM dealership should be able to diagnose the issue in short order as they do have the computers to read any codes the car might be throwing and as I mentioned to test the key.
They did ask me a question I couldn't answer...does this happen EVERY time you attempt to start the car?
Btw, I know the car isn't a Chrysler, but issues with these systems are not unusual. My son told me they frequently get the same complaint where he works and Chrylser knows they have a problem with their design (different than the one GM uses). I was told that if it was the VAT, that after trying to start the car 3 times, the computer (if it is functioning properly) will lock you out and the car will NOT start period. The 2 mechanics here tend to think it is the ignition switch.