The WLC reports that wireless clients that run the Temporal Key Integrity Protocol, mostly the Wi-Fi Protected Access pre-shared key, have an incorrect WEP key error.
This problem is documented in Cisco bug ID CSCse11202. It is first found in version 3.2(51) and is first fixed in these versions:
It is important to note that the 4.0.206 code contains a few bugs, which includes Cisco bug ID CSCsh50966, which is in Verified status. In this bug, the WLC does not respond to unicast Address Resolution Protocol (ARP). Manually add the MAC entry in the switch on which the WLC is connected or manually enter the command arp 10.1.1.1 0000.0102.abcd arpa in Global config mode on the router in order to workaround this issue. The maintenance release 3 for the 4.0 code is scheduled for release soon. Refer to Cisco Downloads in order to upgrade the Wireless LAN Controller. Refer to Release Notes for Cisco Wireless LAN Controllers and Lightweight Access Points for Release 188.8.131.52, which shows Cisco bug ID CsCse11202 in the resolved caveats section......
Backup the current configuration to the Trivial File Transfer Protocol (TFTP) server through the web interface or the command line interface (CLI) with the transfer upload command. Also, it can be prudent to save the current code in the event that there are issues with the new code. Prior to the upgrade, shutdown the B/G and A networks under wireless, then re-enable them after the upgrade. Use these commands in order to upgrade through the graphical user interface (GUI) or the CLI: