Obviously, you will lose that last Redo, in the process, but you should then be able to check things out, with the next Redo. I'd try that, and see if things get back to normal. What I would also look into would be your memory/resources, and maybe their being filled up.

Still, some programs are rather rogue, so it would not be impossible to imagine that something is re-mapping the key-combo, and maybe sometimes after you have started PS. I would find it highly unlikely that any Windows program nowadays would map it to anything else. However, that said, Ctrl-Z has been a very common hot-key with Windows and Windows programs for some time now.

Hot-keys can be touchy subjects, as many different programs map them differently. I do not recall ever having read of this problem, and have never experienced it myself.