First of all I apologize on behalf of myself and everyone else that thought you didn’t know what you were talking about, looks like you stumbled on a very complicated area.
However, I couldn’t find any “no drone policy” for the City of Key West. I did however find the Key West city ordinance for UAVs
Municode Library
ARTICLE VI. - UNMANNED AIRCRAFT
- Sec. 26-300. - Purpose and intent.
It is the purpose of this article to provide the residents and visitors of the City of Key West protection from invasions of privacy, and reckless operation over crowded areas, due to the rapid implementation of drone technology being put into use by individuals and business entities. The unregulated use of drones also poses a significant public safety concern to individuals and property on the ground and other nearby aircraft in the event of malfunction, operator negligence, loss of control, or other inability to sustain flight as intended. Nothing in this ordinance is intended to prevent, prohibit, or regulate any type of drone or remote controlled model aircraft that are otherwise permitted by the FAA for recreational use, or any operator who lawfully possesses a Certificate of Authorization or Letter of Exemption issued by the FAA.
(Ord. No. 16-02, § 1, 2-17-2016)
- Sec. 26-301. - Definitions.
The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this article, except where the context clearly indicates a different meaning:
Drone means any powered, aerial vehicle, that is either fixed wing or rotor-operated, that does not carry a human being, which uses aerodynamic forces to provide the vehicle with lift, that can fly autonomously or be piloted remotely, and that can be expendable or recoverable.
(Ord. No. 16-02, § 1, 2-17-2016)
- Sec. 26-302. - Prohibitions.
No person may operate a drone, whether or not it has the capability of capturing or transmitting audio, video, or still images within or over the City of Key West, unless the drone operator possesses either a certificate of authorization, a letter of exemption lawfully issued by the Federal Aviation Administration, or unless the operator is using a drone strictly for recreational purposes pursuant to the Federal Aviation Administration Interpretation of the Special Rule for Model Aircraft cited as 14 CFR Part 91 and attached as Exhibit A.
(Ord. No. 16-02, § 1, 2-17-2016)
- Sec. 26-303. - Penalty.
There shall be one verbal or written warning for any first time offender of this article provided that compliance is immediately achieved. Subsequent violations of this article shall be punished consistent with section 1-15 of the Code of Ordinances for the City of Key West.
(Ord. No. 16-02, § 1, 2-17-2016)
So looks like wherever you read that didn’t understand what they were talking about. Now you might have still needed a FAA waiver(waiting to hear back on that) but sounds like you might have even had one.
Do you have that still can you post a picture of it please?
