Thanks for all the suggestions. The issue was resolved by 1) Opening the game in Milti-Player and going to MP Options and verifying the game key. 2) Using the console (~ tild) and then using the connect command with the IP and port of an XI server to connect to an XI game directly instead of using my HLSW game manager. Once the game connected I was able to continue accessing XI servers from my game manager without encountering the dreaded Waiting for Key Authorization.
UPDATE - I lied...game worked for a few hours and crashed and of course, back to waiting for key auth again. I tried all that I did last time but no go. I also tried all the XI suggestions and Google suggestions. I guess I'm not supposed to play anymore
Update, update - I can get on and play on other non XI servers without Keycode Auth message... Hmmm...