I renamed the .kde dir and that solved the problem. I got the default kde desktop and everything works fine. Keyboard is typing normally. Thank you very much. I was planning to re-install the OS. :)
I still cannot figure out why it happened mid-way during an OO document editing.
Whatever caused this was captured in the configuration files in original .kde directory. Assuming that you renamed old .kde directory to .kde_old, running the following command may prove useful to identify the difference between old and new configuration files.
diff -r .kde .kde_old | less
Raghu