Surprisingly, this issue got fixed automatically while I was trying to troubleshoot it. The following steps seems to have fixed it for me.
(1) Removed ~/.gconf/desktop/%gconf.xml using tty1 (Ctrl + Alt + F1). susam@nifty:~/.gconf/desktop$ mv %gconf.xml %gconf.xml-backup (2) Logged into GNOME desktop as 'susam'. After logging in, keyboard input worked. (3) Logged out of GNOME desktop and returned to tty1 (Ctrl + Alt + F1). (4) Restored the original %gconf.xml susam@nifty:~/.gconf/desktop$ mv %gconf.xml-backup %gconf.xml (5) Logged into GNOME desktop as 'susam'. Surprise! Keyboard input worked fine again! In other words, I could not really establish what caused the problem and what fixed it. Anyone has a clue? Regards, Susam Pal