IPod no longer Authorized, since OS 4.3 upgrade

A little bit of history first- iPod touch is 1 year old (3rd gen). Until a week ago, I have had no problems syncing it with iTunes. All of a sudden, after the iOS 4.3 upgrade, next time I connected for Sync, I get:
This computer is no longer authorized for apps that are installed on the iPod "Jeff's iPod Touch". Would you like to authorize this computer for items purchased from the iTunes Store?
When I click Authorize, it prompts me for my account password. Then it tells me this computer is already Authorized. Later, rinse, repeat. It just loops between "Not authorized" and "Already authorized". I have tried to deauthorize the computer and reauthorize it, but that does not help.
Interestingly, my iPhone 4 does not have this problem- it is limited to the iPod Touch only (don't ask why I use two devices- I just do at this point in time).
The only other thing to change was the that I installed a small batch of Windows Updates also just before this happened, but the iOS 4.3 and that both occurred between the last successful sync and this problem.
I can seemingly get the data backed off the device (I think) but can't get past the app sync, and the only way out is to cancel, which leaves the music not synced either (playlists are getting stale now).
I was able to update the iPod Touch to iOS 4.3.1 update and the apps are still there, along with the music. I can use the device, I just cannot sync it anymore.
I also have latest iTunes- 10.2.2.1.
Help!
Thanks,
Jeff

Forgot to mention that I had tried those:
Authorize your purchases from an administrator account
-> Yep, I'm the admin
Authorize using the correct account name
-> Nothing changed- I am only authorizing my devices, and only use my account on the machine. Definitely using the right account name.
Turn Off User Account Controls (Windows Vista and Windows 7 Only)
-> Did this a long, long time ago, so definitely not the issue.
Remove the SC Info folder
-> This was the only new thing that I had seen yesterday when I tried it, and went through these steps, to no avail. Still exactly the same problem. I closed iTunes, deleted the folder, rebooted and relaunched iTunes and synced the device. Same thing.
The problem is the computer IS authorized, and I can sync one device, but not the other. No problem with iPhone 4- just iPod Touch, 3rd gen. It seems to be in a weird state.
One thing would lead me to believe it's a PC/iTunes problem, but then it is only with one device and not the other. Hard to point to the root of the problem. I just don't want to lose the data on the iPod- I've done a lot of work on it.
Thanks,
Jeff

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