After a log night of digging around for stuff I had a lot in my backpack and rest of the inventory slots.
At some point I was no longer able to interact with any of the items.
Or rather I can drag them around but are unable to put anything in hand to be used.
Tried connecting to another server and restarting.
update: I logged back in and tried adding a new survivor. However I ended up with the same.
I then dropped everything and ran around for a bit to find some stuff. Things I found the worked fine.
Some how the radio I had still seem to be attached to me even if I had dropped it because suddenly I was talking to another survivor far away.
He found the stuff I dropped and I went back. This time I could pick everything up again and it seem to work.
However we had a few minutes there of weird glitched. my character couldn't stand still and some of the items on the ground could not be picked up.
We also made a fireplace but were unable to add firewood to it.
And then we were all kicked from the server.
:)