I haven't got a clue what could be wrong, and there's been no other reports of this behaviour. I'd suggest rebooting your PC and trying again to see if that helps.
I also use Excel '97, and I find it very sensitive to what other applications are running. Maybe it has to do with available resources. I often find I have to close all applications except my browser before I can use KM to load a device upgrade.
I re-downloaded a fresh copy of keymaster and now excel loads it correctly however with 8.26 version it tells me the analysis tookpak is either not loaded or not compatible with my version (It's installed in excel 97) so do I need to run an earlier version?
I use Excel 97 on a Win 98se pc and the only time I've ever had any problem with any version of Keymap Master was when using the LOAD function while a Clipboard manager that I use was active at the same time.