Dan,
I don't know if you've read this whole thread or not, but I have. More than once.
Yes, the general consensus is that it is the keyboard.
There seems to be no common cause. We have three G3 Dual USB iBooks (and one iBook G4), and not a stinker in the bunch. We eat chips and popcorn while using them (not advisable, I know), and still no stench.
It may be a combination of factors causing this. All but one of ours is left on 24/7, so there is no heating up/cooling down, which, I suppose, could be a factor.
I have a hunch, based on experience here, that the problem is pretty limited or we would see even larger numbers of reports of this problem.
Undoubtedly, the iBook G4 keyboard has been redesigned. It has its own keyboard problems, as you probably know. The letters wear off. As I type this on my iBook G4, my "A" key is entirely blank, my "N" key is reduced to a dot that resembles a period, my "E" key only has the bottom line, making it look like a hyphen, the "S" on my "S" key is missing its top half, the "C" key has the top third gone, and the top of the "O" is missing on the "O" key. I'm a touch typist, so it's not very bothersome to me, but I will be calling AppleCare and asking for a new keyboard before my warranty is up.
Over in the iBook G4 forum, as you can imagine, there is a long thread about letters wearing off the keyboard.
I don't know if you're interested in the iBook G4's, too, but if you are, you may want to head over there and check out that thread, too.