Somebody else has had this problem recently. Try scrolling down the Illustrator forum for "Shift Key doesn't work".
Try to remember if you made any changes to your system lately - like OS update, etc. that can always cause some problems. If you reinstall AI, make sure that you trash your AI prefs before reinstalling, as corrupted prefs are a major problem with all apps on all OS's.
Using OSX 10.3.8 on a G4