What kind of problem?

cannot pick up or even examine. Example. I put cursor over item and it say press E to examine, and nothing happens, Does not even show title of painting.

If it doesn't let you collect items, you may have a full inventory. But the fact that it doesn't let you look into things is very strange. Have you tried verifying the integrity of the game files from Steam? It may have corrupted something in Steam. Let me know ;)

I had this same problem. I thought maybe it was conflicting with the controller but I kept playing and when I got to a new section the examine was working again.

I had a similar problem, but I figured out that for me at least it only occurred when I exited the Inventory menu by using the ESC key rather than the TAB key. I'm supplying this information in the hope that it may help the developer figure out why this is happening.