I have experienced the same problem. I'm using the
the following type of syntax

Sub MainTimer()
-- TmrTime = Now + TimeValue("00:00:01")
-- Application.OnTime TmrTime, "Sheet1.MainTimer", EndTime
-- >> other code <<
End Sub

The sub constantly calls itself (once per second) until
EndTime is reached (defined elsewhere). If I begin typing
something in any cell on Sheet1, the MainTimer stops
working until I press the <enter> key. I don't have
a solution to prevent this from happening.

In the VB6 world, where everything is form-based, I've
used something like this:

Sub Form_KeyPress(KeyAscii As Integer)
-- If isBLP Then
---- Exit Sub
-- End If
-- >> other code <<
End Sub

If the variable isBLP evaluates to True, the sub is exited.
Otherwise, the keyboard  entries are processed. I'm afraid
that I don't know of a parallel in Excel when you are
"sheet-based" or "application-based".

Anyone else have any ideas?