Hey all,
I've marked this post as a question, just to distinguish it for those that might be looking for the same problem I encountered, but in truth it's both a question and the solution :P
I'm busy playing through TLJ for the first time (my copy that I bought from GOG, thanks GOG!) (Disclaimer: Any promotion of the GOG brand and its fantastic, unbelievably compatible and exciting products is done at the sole discretion of me! Viva la GOG)... right, now back to the issue *grins*
There is a bug in Chapter 2: "Through the Looking Glass" when trying to acquire the "Iron Key" that is stuck on the Metro Tracks - after having solved this problem (thanks to an earlier save I had so that I could experiment with it) I did a quick search of the net and it seems it is an acknowledged game-breaking bug; to save others the hour heartache I went through, here is the solution:
If you attempt to pickup the "Iron Key" with the Clamp-Rubber Duck-Clothesline thingy (I call it a thingy because to be honest its not really a device, so, it's a thingy :P ) the thingy itself has to be combined in your inventory in a very specific order, otherwise when you attempt to use it to retrieve the key, it will not work. Once you have all the components in your inventory - the clothesline, the rubber ducky and the clamp - making sure they are all seperate at this point, go to the East Venice Metro Station.
The bug: If you attach the clothesline to the clamp before the inflated rubber duck, when you attempt to use the "thingy" to retrieve the key, April will still state that she cannot reach it, despite the thingy being constructed as it should be.
*See next post for the solution.

You know what's funny ? I got it WRONG the first time I played TLJ and after *hours* of frustration I finally read about the solution in a walkthrough ><'.
I only used a single save-slot, too. After all - I knew you can't die in TLJ...
Still a great game, though.

Thank you Pythos. I wasted only an hour :)

Oh God, so THAT was what was wrong, I spent hours over trying to solve that...

I have attached the clothesline to the clamp first.
Then before add the rubber duck I have removed the band-aid from the duck.

If I hurry up to do this tree steps:
1. remove the bandaid
2. add the rubber duck to the clamp+clothesline.
3. Use duck+clamp+clothesline to retrive the thingy
I get the thingy !
But I have to hurry up, 'cos once you remove the band-aid you hear how the rubber duck lose air.

I wasn't fast enough the first time, so, I remove the rubber duck from the duck+clamp+clothesline and blow it up again (choose the rubber duck from the inventory and the use the talk icon).

Has someone tried this ?

I just started replaying this gem of a game, and had not encountered this bug when I played through this game years ago.

I just spent a frustrated hour, and landed here, so I thought I'd resurrect this post and correct some misunderstanding.

The bug has nothing to do with the order in which you combine the items. I think this is why the bug appears seemingly intermittently.

What causes the bug is if you combine the clothesline with the clamp from the closeup view that appears while you are examining the clamp. Once combined in this way, then April will always say that she can't reach the key, even after the rubber ducky is correctly inflated and combined with the clamp.

In order to avoid the bug, you just have to combine the clothesline with the clamp from the inventory screen. If you do this, it doesn't matter what order you do the combining in.

I hope this helps save some time for folks.