Just what I was thinking, thanks Butter. I'll post my result to help others.
The following script should be applied to the door key:
;Artificial Intelligence Script
;Header
desc = Pickup Item (key) display persistant key HUD
;Triggers
:state=0:hudreset,hudx=10,hudy=15,hudimagefine=gamecoretextpickedupakey.tga,hudname=keyprompt,hudhide=1,hudmake=display,state=10
:state=10,plrdistwithin=40:playertake,coloff,plrsound=audiobankmiscping.wav,hudshow=keyprompt
;End of Script
Then apply this script to the corresponding door:
;Artificial Intelligence Script
;Header
desc = Key Door (Open 'With Key' and Close) removes persistant key HUD
;Triggers
:state=0:hudreset,hudx=50,hudy=90,hudimagefine=gamecoretextlockeddoor.tga,hudname=keydoorprompt,hudhide=1,hudmake=display,state=10
:state=10,plrdistwithin=60:hudshow=keydoorprompt,hudfadeout=keydoorprompt
:state=10,plrdistwithin=60,plrhaskey=1,plrusingaction=1:state=1,setframe=0,sound=$0,hudunshow=keyprompt
:state=1:incframe=0
:state=1,frameatend=0:state=2,coloff
:state=2,plrdistfurther=60:state=3,sound=$1,colon
:state=3:decframe=0
:state=3,frameatstart=0:state=10,setframe=0
;End of Script
I tried initally to use the fadeout action on the hud, but it would pop in then fade and pop out again. Using the simple action "hudunshow" simlpy turns off the display when the door action is performed.
