are you both playing over the same internet connection?
because the lagout with "keycode still in use" is when your connection isnt powerful enough to hold 2 players on one connection without lag, so it will either reboot the connection or the internet will just stop being an internet connection.
because the keycode still in use message is usually when you lose internet connection when still in a game.
you are unable to get back in to any servers until you re-verify your keycode, and you can do this by just verifying your code in the options menu in cod4