Issues with Bluetooth Connections in 11.10
Well, I found a workaround solution to the issue. I posted a similar question over on the BlueZ developer mail list and got several responses. It seems that there was a regression bug introduced somewhere in Linux Kernel 3.0 that was related to the Bluetooth Secure Simple Pairing (SSP) protocol used by Bluetooth 2.1 + EDR devices. The bug prevents reconnection of a device that was originally paired using SSP mode, that is without entering the pin code during pairing. Here is a link to the bug report: https://bugs.launchpad.net/ubuntu/+source/bluez/+bug/931860.
Its not clear when the bug will be corrected in the Linux Kernel or whether it will get incorporated in the 3.0 and forward releases. If you are experiencing this same issue, there is a workaround that worked for me. The workaround involves disabling Simple Secure Pairing and letting the pairing default back to regular non-SSP mode. You can accomplish this by running the following command:
sudo hciconfig hci0 sspmode 0
You'll have to run this command again after each reboot in order keep it disabled to allow reconnections to happen. I hope this helps someone else as I've spent many frustrated hours trying to find a solution to fixing something that just used to work in prior releases.