Anyone have any suggestions? I use the drop key when in inventory and nothing drops. I've verified the file integrity of the game cache and it says files failed to validate and will be reacquired. I put in a support ticket and he suggested the later steps which I did several times. I even signed out of steam. Also, in the controls, I see no way to change the key for drop. In fact, there is no choice for drop item. Any help would be appreciated.

Have You modified which Key performs a function in the CONTROL section of the Menu? I am on a PC, and am not sure what the Console equivalent of the Escape Key would be.

Its not a quest item is it? those won't drop.

What key are you pressing, and what are you trying to drop? I just press R which is the default button, you might have to check if you changed it to something else. It should be the same as ready/sheath weapon.