FYI... I bought an 01 XJ8 that the trunk only opened with the key. After replacing the fob battery and going thru the manual (useless), I checked the interior trunk button which had no affect. Then, I noticed when opening the trunk lid with the key that the 2 little lights were not illuminated. This was the clue to the problem...electrical! Here's the solution...
Pop the small, plastic buttons holding the carpet to the lid with a plastic panel button tool. Then pop the larger button on the right trunk hinge that holds the curved hinge cover. Remove the cover and this will expose the wire harness coming from the back interior panel up to the trunk lid. The harness will be wrapped poorly from the lid to the joining end at the bottom of the hinge. Peel back the wrapping at that point and closely observe all wires where they came out of the wrapping. Of the 10 wires in the harness I found 6 were broken! It is a "pinch point" in the harness snaking up along the hinge, disguised by the curves plastic cover. I reconnected the wires with 18-22ga butt connectors, wrapped the new repair in wire tape and slid a length of plastic flex cover (the ribbed style) from below the repair joint all the way to the point the harness disappears into the trunk lid support structure. Lastly, to avoid the "pinch point" issue completely, I attached the flex cover portion of the harness OUTSIDE of the hinge with small zip-ties. Curved hinge cover back on, carpet lid panel re-attached and final check for clearances. Common, annoying problem fixed!!!!