Been having this same problem. After patch update I get kicked from all Battleye enabled servers. I have two computers running XP and Windows 7 (64) and two different Steam installs and I get the "Battleye Initialization Failed" with both when connecting to a server. I can join a server and choose roles, but once the map finishes loading I get kicked backed to the MP server list.
I had never heard of the DAO Berzerk server until I read your post (don't know why I never noticed it in the server list before) but I decided to try it out and I ended up spending way too much time there. I blame you.