Could be the clutch on the starter gear. (The bit that lets the motor speed up after it's started and the starter is still enguaged.) Check this by anchoring the starter, turning it on and sticking some wood (carefully) into the starter gear. It'll stop if that's what it is. Had it happen on my old HQ. Back then it cost around $20 for the part to fix it (Holden's are much cheaper to fix though).

I'm pretty sure the key just powers the solenoid so if that were the problem it just would't do anything. Usually the solenoid fires, enguages the gear and at the end of it's throw connects the starter motor to power.

Hope this helps.