Red Hat Enterprise Linux ES release 3 (Taroon Update 8) Kernel \r on an \m
Is there a server log-line saying you have a sig-11 crash?
No that is the only line (with verbosity DEBUG2).
What's puzzling me is why shift+return is different from just plain return (which presumably works). I'd suspect readline or similar. Try something like "rpm -q --requires postgresql-client" (you'll need to check the details, haven't used rpm much recently) to see what packages psql is depending on. Then just check they look OK for your installation.
Here's the results for that query but I don't know how interpret them: