The keyboard driver uninstall worked for me for awhile (I had to uninstall all keyboard drivers, not just the P/S 2), but the issue came back and I didn’t want to have to uninstall drivers every week to get the keyboard to function properly. After looking into it some more, it seems that “filter keys” is getting activated in the background somehow. Even if it shows up as “off” in your accessibility settings menu, the issue I was experiencing felt just like filter keys was on.
To fix this once and for all, I went into Regedit > HKEY_CURRENT_USER > Control Panel > Accessibility > Keyboard Response and set the Flags to 122. 122 is the flag to turn filter keys off completely. After logging off and back in, the keyboard worked perfectly again. For anyone experiencing a slow response and/or repeat rate, the above may work for you. Obviously, be careful messing around in your registry.