The challenge description says "3. Reconstitute a 41-character key from the resulting table, inserting the ^ character at the same position it occupied in the wrong key"
This makes no sense, since the ^ character has a certain position in the 31-character key and therefore this solution is not accepted.
You have to leave the ^ character at the same relative position it occupies in the 31-character key.
D3d4lu5 is correct. The quoted text needs to be amended to read:
"3. Reconstitute a 41-character key from the resulting table, inserting the ^ character so that it will occupy the same position in the derived subkey as it does in the subkey derived from the wrong key."
Sorry for the mistake, and thanks for catching it!