It sounds like a keymap/keycode file somewhere either got lost in the
upgrade, but where? Anyone here wrestle with this thing before?
Well, I haven't had that exact problem, but....
Is it possible to login to the X server locally? If so, are the keys OK?
If that checks out, I might boot one of the M$ boxes off of a live CD and run:
X --query <server-IP> :1
See if the problem persists. If it goes away, there's probably a settings/config file somewhere on the M$ box.
If the problem persists.... I don't know! How do the clients connect - cygwin/X11?
Chris