Thanks to Wim Coorevits for digging this up!
If the Fn key is pressed down, then CTRL is pressed down, then the Fn key is released, then the CTRL key is released, the CTRL key becomes locked. Pressing it and releasing it has no further effect. All keys that are pressed act as if CTRL was pressed down. All mouse clicks happen as if CTRL was pressed down.
Unless you turn off the computer, or you know the secret magical keystroke combination to unlock it! Simply hold down Fn, tap CTRL down, and then release Fn. Voila! Working CTRL key again!