If you're in single player mode, then simply place the chalice on the little button that
makes the key pop up, and even though it may hurt you, if you go over and try to pick it
up, it will most likely knock the key on the ground, and that's when you have mog grab the
chalice, you heal yourself, and put the key where it belongs.

If you're in multiplayer mode, just have your friend pick it up!