I have a Korg C3500 too!
I'm using a Tascam US-122 audio interface. In Edit...Preferences...Devices I have the US-122 MIDI port checked, not "Listen to all midi signals".
If you can use the mouse on the software keyboard in standalone Pianoteq, your audio should be setup correctly here.
For a bit more troubleshooting, if you are using an external audio interface, watch for the midi light to come on while you're pressing keys on that old Korg. If this doesn't work, your problem is in the Korg - interface connection. Verify that the midi cable is plugged into the Korg midi out, and into the midi in of the interface.
Once you have midi lighting up the interface, check if the software keyboard lights up as you press keys on the Korg. If this doesn't work, check for the latest interface drivers, if needed, and test other parts of the interface - make sure that there isn't a midi switch or something that has turned midi off.
Report back with the results so far and hopefully you can say the problem is fixed!