Yes, the key turns and does not feel like anything different than normal. It has a spring return mechanism on the key cylinder, and that part still works. The only thing abnormal here is the cap will not come off. At all. I tried hitting it at various angles with a large rubber mallet while trying to persuade it. I am sure it's not frozen now that I've used a hair dryer for a good long time.
Regarding LockDoc
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I've never had one but aren't they spring loaded? I mean don't you have to put a little pressure on the key to overcome the springs and retract the locking tabs?
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Yes I believe that is how it works, and to the best of my ability I have relieved the pressure on the locking tabs by compressing the gasket.
The best I can figure is it just utterly failed or was somehow damaged without outward visible clues.