Me too. I saw a post which suggested the need for allowing 3rd party cookies, another which reported it was fixed by clearing your cookies and trying again. Neither worked for me. Nor did logging out of both wordpress.com and my own site. The error message is presumably not reflecting the actual error – since it gets into the loop even when there is a key and it is correct.
I’m using it with 2.6.0 – I wonder if anyone is having the same problem with 2.6.1? i.e. would upgrading fix this?