Afraid I can't help you, JaxWeb, as I've been having a similar problem transferring a domain.

Ours has been with RegDiscount.com - part of Register.com - for some years. As we've bought others through GoDaddy, we want to consolidate our domain ownership with a single registrar.

The Authorization key supplied by RegDiscount.com is not accepted by GoDaddy in the transfer process. As would be expected, GoDaddy say it's the current registrar's problem and RegDiscount/Register/Rconnection.com (latter providing 'Support'!) say it should work.

Anyone found a way around this?