I had the same thing happen. I believe what is happening is that one or more keys are getting "stuck" for some reason. One sign was when the keyboard appeared to work, alt+key simultaneous combinations could not be used but alt then key combinations could be used. Oddly enough what helped the issue was squeezing the device on the right and left side just below the USB port. The keyboard ribbon cable is located just below the USB port and applying pressure there seems to shift the delicate cable somewhat so it makes contact again. In the end, I had to return the unit as defective.
T-Mobile 9700 with a working Alt key :P