"Invalid Node" from panels_node_legacy_edit_validate

Installation details: Drupal 5.9 with php 5.1.2 and panels-5.x-2.0-rc1a

When I attempt to add "node content" to a Panel using the "Configure Node Content" pop-up (with autocomplete) I get "Invalid Node".

If use autocomplete to select a title called "Zoo Animal FAQs [nid: 22]" and then backspace over "[nid: 22]" so that I have "Zoo Animal FAQs" in
the title field then I no longer get the error.

If I type 22 in the title field and click "add pane" then I get the "Invalid node" error.

The problem appears to be in sites/all/modules/panels/panels_node_legacy/panels_node_legacy.module.
Version: panels_node_legacy.module,v 1.1.2.13 2008/08/03 04:43:03 sdboyer Exp $

I think the problem is in function panels_node_legacy_edit_validate. I think this "if" statement never returns TRUE:
if ($nid = panels_nid_autocomplete($form_values['nid']))

Here is what the function looks like on our server:
function panels_node_legacy_edit_validate($form, $form_values) {
if (!$form_values['validate_me']) {
return;
}

if ($nid = panels_nid_autocomplete($form_values['nid'])) {
form_set_value($form['nid'], $nid);
} else {
if (!preg_match('/^[@%]\d+$/', $form_values['nid'])) {
form_error($form['nid'], t('Invalid node'));
}
}
}

We get the "Invalid Node" error with keyboard and mouse so I don't think it is the same problem as http://drupal.org/node/281948 .

RickC