I've got the same problem with my fresh Linux From Scratch installation!
The only thing I can add on this problem is it only appears when I use a 
virtual terminal such as xterm and gnome-terminal (that use pts*). With a 
"real" terminal (tty*) the behaviour is as usual and works fine! As I use the 
same bash/readline in the different terminals with the same settings (i.e. 
everything with UTF-8, locales, etc...) I just wonder if the problem can't come 
from one of the Xserver's libraries. Changing the keyboard driver with Xorg 
doesn't resolve the problem (evdev/xkb etc...). Keys work fine with Gnome 
Desktop but something is wrong between the Xserver/Window manager and virtual 
terminals.

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bash utf-8 characters issue in xterm-like virtual terminals
https://bugs.launchpad.net/bugs/367369
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