Just to add to this:
1) I also experienced this issue exactly as described. "Turn off your NumLock" suggestion, does not fix the problem for me.
2) In addition, I also experienced CTRL+NumPod6 (i.e. strafe-right command) failing to "register"; in other words pressing CTRL+6 I expect PC to move 1 tile to east but it stayed where it was.
(I am using Unreal World 3.70beta, Steam build, almost-unmodded except that rope quick cutting recipe)
Edit: I was in game just now & noticed another impact of this NumPad Bug.
As you know, when one have items on the ground and would like to [p]ush to an animal, one gets the "Select Target" popup window on the right hand side of screen, which auto-numbers potential push-to targets such as:
[1] Dog1
[2] Dog2
[3] Bull1
[4] Sheep1.
In this popup window, "<selection indicator> line" always starts with line number 1 (the top most option in the list).
As is usual with UrW controls one can JUMP to a selection using the keyboard digits such as 1, 2 ... using the main row number keys (above QWERTY etc) which is a final choice instruction.
Alternatively one can browse target list using various keys such as PageUp/PageDown keys but one can also use NumPad Keys such as NumPad8(up)/NumPad2(down) as well as NumPad4(left)/NumPad6(right).
Now here is the impact of the bug: in this screen, if one presses the key NumPad2 for example with the intention to browse the target list (i.e.: move down in the list), UrW occasionally, in error I presume, takes that key as keyboard-alphanumeric-number-2 and thus takes it as a final choice instruction rather than browse instruction.