There have been no posts on this subject in quite some time.  Some of the older posts claimed the keyboard worked after booting.  Mine didn't.  It turns out the keyboard itself was bad.  After replacing it the problem went away. 

I tend to think of keyboards as something so simple they never fail.  Not so.  If you run into this problem and have another keyboard try it.

It turns out my Dell keyboard would work on my Mac so there must be something the computer is looking for to tell it is there and connected.  It did find my Mac keyboard okay.

What tipped me off was I got the same alert whether the keyboard was plugged in or not.  That led me to suspect a keyboard failure.