Yes! Solved!!

Thank you Roman Bazalevsky.

I found the folowing line in .bashrc:

xmodmap ~/.Xmodmap

I simply commented the line and it works!  (Apparently no secondary
effects having it commented)

(: Happy :)

Thanks for all the people that worked trying to solve this bug.

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https://bugs.launchpad.net/bugs/433355

Title:
  Down Arrow stops working when open a new terminal window

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