Yes it's possible that the function keys would work and not others. I have never seen it but it could happen.
Two suggestions for troubleshooting: First, once you are booted into Windows, try plugging in a USB keyboard. If that works you can just use it. However if bad capacitors are the cause, the problems will "spread" and eventually the computer will not even boot up, so you may have just bought yourself a little time.
The positive way to find out whether this is a hardware or software problem is to boot from a bootable floppy or CD and try to do something, anything that puts characters on the screen. For example, you could boot from a Windows boot floppy which would put you at the A:> prompt. See if your keyboard functions by trying to type in some random characters at the command line. If the PS2 keyboard works under those conditions then you have a Windows problem.
Question -- are you sure your PS2 keyboard is okay? have you tested it on a working computer?
Edited by DaveM59, 10 June 2006 - 09:20 AM.