Can anyone tell me why the keyboard is creating this error code on restart after installation of the keyboard?   ERROR CODE 0221   Msg ERROR CODE 2000-0221   Msg Timer-Interval timer Not functional

I would say it's a system board issue if you didn't say it went away when unplugging the keyboard and also does it on your R3. This is a guess but I think the keyboard is toast. It's gonna be hardware and if so there really is no fix other then a new keyboard.

But lets pretend you didn't try the keyboard on another system. When you boot the system hit F12 and run the PSA test. See if it gives you an error code.
Run Built-In Diagnostics for Your System: http://support.dell.com/support/topics/global.aspx/support/kcs/document?c=us&l=en&s=gen&docid=DSN_14B3819735D6B40EE0401E0A55177ED2&isLegacy=true  

You can also try updating the BIOS. If you do update the BIOS then you should call Dell and have them walk you through it. There are two reasons for calling Dell and doing it this way. One is a BIOS update can fail and brick your motherboard so it must be done right. The other is if this does happen and Dell recommended you to do it then they will replace the motherboard free of charge.

Last thing you could try is a fresh OS installation. There could be an issue there or maybe even with Win8 and the Area 51/TactX keyboard combo. Not sure but it is possible.

If none of this works then I think it would be safe to say it's the keyboard that failed. Testing it on another system plus all the trouble shooting would really leave this as the only other explanation. Dell just had the TactX keyboard on sale for $69.99 ( $10 off ). If you do buy another one do it on the phone and explain yours just failed and you don't see it on sale anymore. Be nice and sometimes they will still give you the sale price.