There are already a couple of good posts on switch replacement (https://forums.vwvortex.com/zerothread?id=3445064&page=1, https://forums.vwvortex.com/zer...age=1) but very little about drilling out an old cylinder and replacing it. The battery should be disconnected before beginning work (have that radio code handy) and of course, I am not liable for any damages as a result of use/misuse of this guide. All pictures are of a 2000 EuroVan MV.
Disassembly of the lower dash (for the Mk3) is covered in the above guides so onto the EuroVan. There are three 13mm flange bolts holding the lower dash assembly on (two on the left under a plastic cover and one under the dash itself). Once these are removed the whole unit moves to the left and out (there is a locating lug near the third bolt).
Switch Replacement Notes
I did not find it necessary to remove the steering wheel/airbag/shaft but it might be easier for you depending on the application. The switch retaining screw can be accessed from under the dash and if replaced with an allen cap screw (of the same length/pitch), driven by a ball end allen driver, can be reinstalled easily (despite the awkward angle).
I've read that the hole should be 10mm in and 13mm down but rather that go by that, I looked at the new one and determined that the spring (based on orientation of the key in the off position) should be closer to the driver's seat but inside a small diamond shaped marking on the lock housing. I drilled the hole with a 1/8" bit and ended up enlarging it somewhat in order to compress the spring.
Here is the spring that must be compressed with a small screwdriver, awl, stout pen, etc.... While the spring is compressed, the protruding portion of the lock should be grasped (with pliers/vicegrips) and worked loose. It takes a fair amount of force to dislodge it.
The original lock failed at this point and it isn't surprising that it did. The replacement cylinder had a much larger crossection at this point. I don't see how the engineers (I'm a mechanical engineering student) expected a threadlike part of cast aluminum to withstand this kind of torsional load (especially on a critical part).