great post hillbilly.
the way i see it theo, the (dam) surface area in contact with water is the same whether or not there is a keyway. since (an ideal) keyway is buried below the interface with the pond water, there is no net change of force on that part of the dam in contact with the water. it makes the dam stronger, but does not affect the force exerted by the water.
you guys are right that if the surface area is increased the pressure is decreased, but all things being equal (same size dam plus or minus keway) a keyway itself does not affect hydraulic pressure on pond side of dam.
unless i'm missin something, which is ALWAYS possible.