Is there a diagram on how to get this piece back in or is the PATS system totally screwed?

 

Welcome to the forum

That's not part of PATS transceiver ring, the Black ring, have a look here: https://www.ranger-forums.com/8-cyli...llation-48794/

The blue part is for the "key left in ignition" Dinger./chime
So if its working when you open a door and key is IN the ignition you would hear a "ding, ding, ding, ect....."

Pull out the ignition key cylinder and have a look inside
This "sensor" is just a Ground when key is IN the cylinder, no Ground when key is OUT
So you may be able to glue it back in place
If you remove it you will just lose the dinger function, so no reminder that you left key in ignition, so get a spare WORKING transponder key and a "hide a key" box, lol

If you are having a PATS issue this blue part ain't the issue

 

The key won't turn into the run position because I believe the steering wheel is locked.

 

And you have tried turning/wiggling the steering wheel while turning the key I assume

The key is what locks the steering wheel, on the end of the key cylinder is a geared Rod, then key rotates its gear, which slides the geared Rod and that unlocks the steering wheel and also slides the ignition switch(under the steering column) into its 4 positions

 

Can I hot wire the truck while the steering wheel is locked? How would you suggest unlocking it? I can show proof of ownership.

I ended up getting the steering wheel unlocked, key still won't turn. I think the tumblers are wore out. Hot Wiring seems like a good option.

 

You can pull out the ignition switch under the steering column, its above the brake pedal
You can then manually slide the ignition switch into its 4 positions, ACC OFF RUN START, same as turning the key did

Google: How to Replace Ignition Switch 95-04 Ford Ranger

Watch the video

The key still needs to be in the ignition cylinder to pass the PATS test, to start engine
If Theft light starts to Flash Fast then engine will not start, no work around for that

There is no way to "hot wire" a Ford vehicle with PATS(passive anti-theft system), wouldn't be much of an anti-theft system if there was a way, lol