Hi John,
I went into my Adwords account and created a new campaign for the key phrase 'fishing lures' and was able to complete the process using a bid of 25 cents. Your issue may be a result of the Google spider not ranking your landing (ad destination) page very highly for the key words/phrases that you wish to bid on. Google's algorithm for Adwords has been changing a bit recently and more changes are anticipated due to Y!'s announcing upcoming changes to their PPC system.
With the exception of two pages, your entire site seems to have gone supplemental on the google index. This has been the case for many of valor's customers. I have a thousand pages that went supplemental, however, Google seems to be moving a few dozen back into the main index each week.
Don't expect perfect explanations from the Adwords people because they do not interact with the spider/index team and it actually takes Google a few weeks to let the Adwords team know about changes effecting Adwords customers.
Al