READ-FROM-STRING is one of the rare functions that takes both &OPTIONAL and
&KEY arguments:

       READ-FROM-STRING string &OPTIONAL eof-error-p eof-value 
                               &KEY :start :end :preserve-whitespace

When a function takes both types of arguments, all the optional
arguments must be specified explicitly before any of the keyword
arguments may be specified.  In the example above, :START becomes the
value of the optional EOF-ERROR-P parameter and 3 is the value of the
optional EOF-VALUE parameter.
     
To get the desired result, you should use
   (READ-FROM-STRING "foobar" t nil :START 3)
If you need to understand and use the optional arguments, please refer
to CLTL2 under READ-FROM-STRING, otherwise, this will behave as
desired for most purposes.