An embedded Keynote video (mov format) stops playing in 2 seconds.

In my case it's a 3mins, 30 seconds video clip that gets stuck at 2 seconds, and then again at 3 seconds...and then plays in entirety. I tried all the animation combos but it doesn't work.

I also found out that the clip works fine on a new file and also when it's freshly embedded. It starts behaving this way once I save the keynote. I also tried a lower size rendition of the clip, but it doesn't help either.

Sounds like you have a slide transition set to autoplay with a delay of 2 seconds: Inspector > Animate > Transitions

Change the delay to longer than the video clip, the maximum is 10 minutes, or set the Start Transition dropdown menu to On Click to advance manually.

What version of Keynote is this?

What is the filetype and size of the video file?

What is the amount of RAM and free disc space?