Spotted the issue by looking through your code; I just needed to enable the OSC_EN bit of the GENERAL_CFG_B register (0x4D). Column lines are driven low as expected now, and the row/column lines are switching correctly for key presses. I can carry on with the rest of my code now. Thanks a million for your help, really appreciated!
The PmodIOXP demo has an example sketch IOXPDemoInt here for MPIDE that has the PmodKYPD plug into the PmodIOXP like you are describing. The sketch/libraries should help you get your project working. I used the cerebot MX4 ck chipkit which as essentially the same as the chipKit pro MX4. I was not able to get the sketch to work in the Arduino IDE but was able to get it to work in the MPIDE IDE. I have included some pictures below of my setup. Hope this helps!