Thanks for the post and code. I am experiencing the same problem with an iPad app that has an option for input from a bluetooth keyboard. I updated to AIR 3.7 and switched to StageText vs TextField but it didn't help. If I use keyboard events (KEY_UP or KEY_DOWN) it works fine locally but not when I test on an iPad with a connected keyboard. If I listen for the CHANGE event it works OK on the iPad except that it seems to lose focus and I can't use arrow keys etc..
I tried setting stage.displayState = StageDisplayState.FULL_SCREEN_INTERACTIVE but it doesn't seem to help. Has Adobe acknowledged that this is an actual bug or are other developers doing something different to read keyboard input?
Michael