Now, does ANYONE know what's wrong?
Well, since you don't have any mods running, try posting in the http://www.gamesas.com/index.php?/forum/23-oblivion-hardware-and-software-issues/.
This may just be a massive, unfixable glitch. I don't know if it will help, but maybe try unplugging and replugging in your keyboard, or put a new one in. I'm no tech expert, though, so I don't really know.