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I'd say Mastervtec is right about the passcode problem, and you'll almost certainly have to get it into the dealer to get it right. It's worth trying with a second key (if you have one and haven't tried that yet) in case the problem is with the chip on the key you're using.
I got a couple of door keys cut for my van (not chipped) and if I try to start it up with them it behaves exactly the way you describe. My van isn't a GM, but I suspect the system is pretty similar.
An interesting thing I figured out for my van is that I only need to hold the chipped key near the ignition cylinder for a couple of seconds when I start and it will run just fine with the dumb key. The verification just occurs at startup I guess ...
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