Dealerships can't program my keys, and can't figure out why

As I write this, my 2001 Prius is in the shop for the third time in three weeks ... and all I want to do is have a copy of my key made. Two different dealerships have tried and failed multiple times to program a copy of my master key. I've been told many different, often conflicting things about why this might be.

Questions:

1.) A few technicians have told me you cannot program a new key without the ORIGINAL master key -- the one that came with the car. Others tell me that as long as you have a COPY of the MASTER, and not a copy of the sub/valet key, it should work fine. Anyone know which of these is true?
(I bought my Prius less than 2 months ago from a private owner, and am the third owner, so I have no way of knowing for sure whether my master is the original. The prior owner tells me it's "original -- or at least original to me." But he was able to succesfully copy the master, so it would seem that original or no, it ought to work for me.)

2.) As I write, my dealership is using a scan tool on my Prius to try to find out why it won't make copies of the key. The night manager, and the night staff, at this dealership told me repeatedly that the scan tool can NOT be used with '01 Prii. But the daytime manager, unpeturbed by the night manager's warnings, insists no such restriction exists. Anyone know who's right? Or why?

3.) I know there is a limit to the number of keys that can be made by the computer. ...The prior owner had at least between 2 and 3 copies made...
I've read that 2004-05 Prius owners can have 5 masters and 2 subs total, including the originals, at any one time. I don't know if the limits are the same for the 2001 Prius. Anyone know?

4.) Some technicians tell me that if you've made the maximum number of copies, you have to replace the computer. Others (and my Internet research) tell me that it's possible to erase the programming on all the keys and start over. Then, in other words, I'd be able to own the maximum number of keys without replacing the computer even though copies have been made before. Anyone know if this is true? My dealership is reluctant to try this, for fear they'd leave me without any working keys.

5.) We tried programming the Toyota blank the dealership sold me (it's a black transponder key almost identical to the original master) as a "sub" key, with no success. Should I be able to program a master blank as a sub, or do I need a gray Toyota blank that was specifically designed to be a "sub"?

6.) The dealership seems to think I'm going to end up having to replace the compuer, though they are reserving judgement at this point. Toyota corporate has told me I will almost certainly have to pay for this new computer, as the car (32,000 miles; issued in 2000) is no longer eligible for the basic factory warranty. While the main computer is warrantied for 80,000 miles, the computer that controls the key programming is not. While the hybrid system is warrantied for 100,000 miles, I'm told this is not a hybrid system issue. And while owners of other Toyotas of my car's age are allowed to buy Extra Care extended warranties, I was not allowed to because my car is a hybrid. In other words, they won't cover it because it's not a hybrid part, but they also won't cover it as a non-hybrid part because it's in a hybrid. I'm screwed either way.
The dealership tells me Toyota used to "Good Will" new computers to people in this predicament. But since they improved the technology on the newer models, they no longer do that.
Anyone have any suggestions to help me out of this mess in the event they have to replace the computer?

...After all of this, I almost wish they'd just pull the plug on the transponder system and give me a straight mechanical key. Almost.

Any wisdom you can impart about these questions is much appreciated!

 

Well, my dealership called. They say they've finally had success in reprogramming my keys. They used the "erasure" procedure, so I can program more copies later if I want.

It seems Naterprius hit the nail on the head: My Prius technician says he had to recharge the 12-volt battery in order to get the process to work. He thinks this was the problem with all of the prior attempts to program keys. I've never had any other trouble with low battery power.

Thanks to everyone who posted for their suggestions...

By the way, Dan, thanks for the DIY instructions. Those are helpful, aren't they? I actually had tried to program the keys with the coastaltech directions, but it wasn't working -- apparently because of the battery issue. (I never braved the "erasure" technique on my own, though, in case the problem ended up being a faulty computer. The dealership had offered to try to get Toyota to help with the cost of the replacement, and I felt my chances of getting "Good Will" support would be reduced if I mucked around with erasing keys on my own.)

Godiva -- I think the owner gave me all the keys he had. But he seems to have lost a few of them before selling the car...

Bill -- Sorry about the double-post. I'm new to the site (this was my first post), and I hadn't yet realized you can see headlines from multiple groups under "Recent Topics."

NaterPrius -- For future reference, now that I'm able to program extra copies of the keys, what's the pin swich...?

Now I'm happy with the transponder system again, for the moment at least. Not that I ever would have seriously considered disconnecting the immobilizer.