Ignition Switch problem

The first thing I would do is clean up that butchered mess, one way or the other.
Round silver thingy you refer to is probably the hazard lamp flasher module.
The yellow wire from ign' switch does nothing more than send a start signal to the starter relay and only when ign' switch is in start position. For the life of me I don't know why anyone would cut/splice anything into that wire.
The aftermarkets replacement ign' switches often have extra wires and wires in the wrong positions. All we can do is match the colors, yellow to yellow, blue to blue, brown to brown, etc... The larger gauge black is to larger gauge black leaving a extra smaller gauge black from the switch unused in most A-body models.