Hmm that story sounds fishy considering you can simply go have a key made up with the VIN if you are a legitimate owner.. Also w-body ignitions are extremely easy to bypass completely, especially a 98 which probably doesn't have pass key. And who really junks a 109k mile car because of a key? Red flag.
They should only have to cut parts of the harness that connect to the car or fuse box, there is no reason to cut other parts of it to get it out.
86 Fiero GT 4spd - L67 swap: VS cam, GenV
98 GTP - Some mods