2011 iMac, OS Lion, Major keyboard issues

If anyone can help me with this problem I would really appreciate it!

The last 2 days suddenly the keyboard on my iMac has gone haywire where it constantly creates spaces while I'm typing, the keys are sluggish and scrolls down pages constantly of its own accord.

I seem to have tried everything, new batteries, disk utility checks, SMC reset, PRAM reset to no avail. It is making the machine near unusable as you can't even type without it automatically creating spaces as if the space bar is being held down continually.

If anyone has had this or similar problems I would really value your input.

Thank you.