P5K deluxe wi-fi ap POST problem

Hi all, I have done more extensive testing and have described this problem in detail, so sorry about posting a book.
Please read the whole post in detail before commenting as this problem seems more complex than even I thought. I bought this board about 7 months ago from a friend who had used it for only 3 months and I saw it working before buying.
After being stored in its original packaging for 7 months I am now trying to use it without success. I am a mainframe computer engineer and I have built more than 30 PCs for myself and friends over the years so I am sure this is not something I am doing wrong. I suspect a BIOS related problem but I can not even get to the point of flashing the BIOS. I have the latest BIOS (1005) (needed for the E7500) on a USB pendrive but the system does not see it at all because I can't get past POST
I have a new E7500 Core 2 Duo processor, Nvidia 9500GT 1 gig and a new 500 watt power supply and 1 x 2 gig DDR2-800 mem stick.

With only these components installed and front panel stuff connected, (no drives at all) it will not go further than the following screen and I have also tried setting it up on a table out of the cabinet to make sure there were no chassis shorts.
When I press DEL on bootup or even when I DON'T press anything, I get 1 beep only and this screen, which seems to indicate a NO KEYBOARD fault:


AMIBIOS (C) 2007 American Megatrends, Inc
Asus P5k Deluxe wi-fi ACPI BIOS Revision 0311
CPU: Intel Core(TM) CPU E7500 @ 2.93GHZ
Speed: 2.94 GHZ Count: 2

Press F8 for BBS POPUP
Press ALT+F2 to execute ASUS EZ Flash
DDR2-800 in Single Channel Mode
Initializing USB Controllers
.. Done.
2048MB OK

(C) American Megatrends, Inc
65-0311-000001-00101111-052507-bearlake-A0761001-Y2KC

However, I believe the keyboard is working because on bootup, the 3 keyboard lights flash and the message is different if I hold down F8 instead of DEL (tried both usb and PS2 KBs)
When I hold down F8, I get the following screen which is slightly different:

AMIBIOS (C) 2007 American Megatrends, Inc
Asus P5k Deluxe wi-fi ACPI BIOS Revision 0311
CPU: Intel Core(TM) CPU E7500 @ 2.93GHZ
Speed: 2.94 GHZ Count: 2

Boot Selection popup menu has been selected
Press ALT+F2 to execute ASUS EZ Flash
DDR2-800 in Single Channel Mode
Initializing USB Controllers
.. Done.
2048MB OK

(C) American Megatrends, Inc
65-0311-000001-00101111-052507-bearlake-A0761001-Y2KC


OTHER INFO
I have tried both a USB k/b and a PS2 and the only difference is that with the USB k/b it does NOT tell me "2048 MB ok", but it DOES tell me that it has initialized the USB controller.
Both K/Bs have been tested on another PC so I know they work.
I have also cleared the CMOS via the normal procedure and even disconnected the P/S and left battery out for 30 min.
I have looked through these forums and found one similar post from another user with a different mobo, but his prob was not resolved.
I have also tried the mem in all 4 sockets. I know it is seeing the mem ok because I get the correct beep codes when I remove the mem or video card.
I have even tried booting without the processor to try a force BIOS reset to no avail.
Holding down ALT+F2 on bootup to try a flash only gives me the same screen as when I hold down DEL or nothing.

Thanks in advance for any ideas you can give me.

Ward