Thanks for the reply. I ended up literally walking over the key on accident when I was searching every box/front yard in town. Even after seeing it, the key was practically invisible without the prompt appearing as I walked close.
Any hints on where the key is during lockout? I've run laps around the town and am not sure what I'm looking for. Is it visible or do I just spam interact blindly? Marked somehow? Randomly placed? I'm so confused. (Yes, I've unlocked Lockout mode proper)