I am experiencing something a little different. Instead of not being able to pick up keys. I am unable to pick up any kind of fish. And as far as terrestrial animals are concerned. I am able to pick up leather but other items dropped by them have stopped dropping. So no more pelts, teeth, body parts, etc.
Well I figured out how to fix the drop problem. You just have to reduce the amount of items you have. For example, instead of having 9999 of x reduce it down to just having 1 of x. If you have multiple species of lets say fish then reduce your entire inventory down to one of each species. Do basically the same thing with terrestrial animals.