Ok - 3rd times the charm. Figured it out. Its the CTRL-ALT sticky thing again.
ALT-1 stills shows the action bar being "hit" but its not actually clicking the button. After "rolling" the ctrl and alt kets a few times, it solved the problem.
This was with Input DIrector shutdown - so its gota be mojo. And I even tried a PS/2 hardware attached keyboard to PC #2 (while it was having the issue) and same results - rolling the ctrl / alt keys "unlocked" them and the "1" key started acting normal again.
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