i did some more searching on the steam forums for you.
also - you don't need to reinstall for a cdkey problem
Ok here goes.
"This happend to me when trying to register illegal keygenerated CD keys into steam"
Is your cdkey legit?
"If the Steam Network is down or too busy you may not be able to register a CDKey to your Account at this time!
You can always look at the Steam Status Page and see if there is something is going on. If the last update for that page is more then 20 or 30 minutes behind, that is a good indicator of a problem.
Please also check to see if there are other players having the same problem on the Steampowered Forums.
If the Network is down, you will just need to be patient and wait until the problem gets cleared.
Usual Solution for this Problem:
You need to enter your CDKey exactly the way it's printed, including the dashes or it won't work."
"Question
I'm having troubles registering my CDkey in Steam.
Answer
When you register your CD key in Steam, it's important that you enter it exactly as it's printed on your package.
If your key contains 25 digits (such as one for "Day of Defeat," "Condition Zero," or from the ATI bundle), you should enter it with the original dashes, as follows:
xxxxx-xxxxx-xxxxx-xxxxx-xxxxx
The same goes for 13-digit keys, which should be entered as follows:
xxxx-xxxxx-xxxx
If, however, you have a 20-digit CD key (such as one for Opposing Force), you cannot use it with Steam."
That about covers it.