I opened an official support ticket for this issue. Below is the reply I received:
There are several possible solutions:
1. If you are running NewView, this is probably the source of the problem. You need to either Alt-Tab out and back into the sim or rename the NewView folder prior to starting the sim.
2. If you have Windows Vista or 7 and have installed an earlier version of StarForce (eg. 3.x), it may be the cause. Please try removing old StarForce drivers with SFREMOVE utility (item "Versions before 5.5"): http://www.star-force.com/support/drivers/
3. Reset keyboard settings. Navigate to <FC2_installation>\Config\Input\Aircrafts\A-10C\keyboard\ and delete or move away file Keyboard.lua. Then repeat for other aircrafts.
4. Reinstall sim from scratch into empty folder (notice that uninstallation leaves settings intact and they should be removed manually).
None of the solutions above have helped though. I haven't tried option 4 since this was a fresh installation already.
Option 1: I'm running the game in full screen mode. I tried to Alt-Tab without solving my problem. I tried also to set the game in Window mode and this didn't help either. Support team has also instructed to rename the NewView folder. Where is this folder located and rename it to what is not mentioned and I have asked for further clarifications.
Option 2: Yes, I'm running Win7 Ultimate 64bit with SP1 installed. When I run the removal utility I got a message that no driver is installed.
Option 3: Deleted all keyboard.lua files from all aircraft folders without any luck also.
I'm stuck to the cockpit screen all the time with the message to press Pause/Break and no key reassignment is also accepted by the game.
This bug must be fixed in a future patch. Maybe an easy workaround for the developers could be to choose another default key for pausing other than the Break key. And maybe key reassignment should work as well too. ;-)