Intermittent Starting (Very Odd)!!

I recently started to experience a bizarre behavior when trying to start my
2008 C350.  I have a Smart Key without Keyless Go.  I insert the key into the
ignition and turn to position 2 (Driving position).  I then twist to position 3
(starting position) and it automatically releases back to position 2.  During
that time the engine cranks, begins to start, then stops.  I can turn the key to
remove, then insert and try to start again.  Sometimes it will start, other times
it will not.  Interestingly, I realized that it will start every time if I quickly switch
the key back and forth between position 2 and position 3 while starting,
rather than just let the key spring back to position 2 after moving to position
3.  

Not sure if this may be the key, the car battery, the fuel pump, ignition, or
some module.  Please let me know if you have any possible solutions to get
the starting procedure back to normal.

Thank you.