There's a few options, and it seems like you may have tried them, but I'll rehash them anyways:
* Go to the Facebook.com/developer page and go into your application. Verify that it looks 'normal'. I've only seen one disabled application (for violation of terms of service), and it was pretty obvious that it was disabled.
* Re-copy and paste the app key, id, and secret into JFBConnect. Try restarting your browser (to clear cache), but this should really make no difference.
* Create new application and enter the keys.
I know, I know, it's what you said you already did, but I have to try. Next steps:
* In the JFBConnect Overview page, is that where you're getting the error (Invalid API key), or is it only when someone clicks the Login button?
* If it's when you click the login button, please go to Facebook.com and login there first with one of the developer's Facebook accounts. Then try logging in again on your site. The error may have more information about the problem (Developers see more for diagnosis purposes).
If none of the above works, I'd ask you to Private Message me a super admin account for the site. I can try one of our known-good test set of keys to see if it works, and if not, debug why.
Thanks