A couple of months ago I did find myself in the situation where an exception was asked for - and granted (with thanks to the comments and advice provided on this forum).
I found that there was a complete ban on one of the kw phrases I wanted to use based around the inclusion of one specific word. To me it represented a global business sector and I was being denied access to promote to it via adwords. That has now changed and the server-level ban was lifted.
The process is there for the protection of the public-at-large. You have to be able to appreciate this, particularly if you are in a legitimate sector (you'll there for understand how many charlatans are out there...).
Whilst the system is not perfect, it can be changed for the better when idiosyncratic glitches appear. Present your case and I'm sure that it'll be in your favour.
Having said that, if the same scenario happens to my sector - watch this space...
Syzygy
I've been able to use various keywords fine in all my ads until today I noticed anytime I used medicine, pharmacy, physician, herbal, in my ads, they have been denied and I must either submit a squaretrade ID or request an exception.
Syzygy, I think this exception request is much more 'routine' than the one that you mentioned - but that the results will be the same.
airpal, based on what you've said, I hope you have made the exception requests. I think you will find that the requests will be approved, and then that you won't have to go through the process again.
AWA
