Odd Apple Wireless Keyboard Problem

After a midnight siesta (?!?), I opened my laptop from bed and landed in lala-land. To start with, MBP screen looked as if the big display downstairs was still connected. After a hard restart, the screen problem was gone but menus and dialogs would stay up only briefly and keyboard shortcuts were being ignored which means I couldn't even shutdown softly. And after a while, a soft beeping noise started from top right corner of the laptop. Definitely odd.
Upon further investigation, I found that disappearing menu and dialog symptom was limited to the Finder and Firefox. So, with TextMate in the foreground, I was able to trackdown the problem to the Apple wireless keyboard, located one floor directly below my bed. Disabling bluetooth solved the problem but removing the keyboard from bluetooth device list solved the problem (and the alarming noise) as well.
When I came downstairs, the problem went away so I restored the wireless keyboard. I am still scratching my head but I am sure laziness and forgetfulness will solve that soon enough.