Dredging up an old thread, but the newer panniers on the Gen 2 have a completely different locking mechanism that was a bit of a headache. In the end due to not taking enough care during disassembly (thank goodness there was another pannier with which to compare), I had to take the first pannier apart again to fit everything correctly.
Basically it is easiest to first remove the screws around the top (and the recessed screws on the hinge side have at nut underneath, something which isn't at all obvious). You'll need to remove the rubber lining (watch out for silicon lubricant, it was very copiously applied on one of the panniers) and eventually the lid and frame around the other side will come off.
Then it's 8 screws inside the pannier to remove the lock mechanism. The top slides off (again not at all obvious when you're not sure how it is constructed), watch out for where the little tabs on the top slide into as it's easy to put it back together and miss something out. Then remove any screws you can see, finally pulling the metal bar that holds the handle in place out. Once this is out, then you should be able to see what's in the picture.
The lock and release mechanism is very specifically located, and if you don't line everything up either it won't go back together, or it will, then it will fail to unlock or remove (again ask me how I know!) In particular, the lock section comes out with 4 screws on the back and has several parts that fit together precisely in order to operate both the opening and releasing mechanisms. The lock barrel and the 4 parts must be lined up so the lock can be turned in the correct direction for both locking and releasing the pannier. If you get it wrong you won't be able to remove the key. And don't forget that the last two slots do not take a normal 1/2/3 wafer (the locking wafer goes in the end slot once you're ready to fit). The release has a catch connected to the top of the lock housing by a thin metal bar that has S-shaped ends. Note these must be pushed into the holes then twisted - don't get this the wrong way round or the bar will only just sit there as is guaranteed to fall out after assembly!
The lock has the housing with the writing on it, a sprung black plastic housing and inside that a thinner plastic tube, together with a rocker arm that controls the level for opening the case (that's the black plastic lever that pops up when push the lock in). This connects to the release mechanism with the long plastic part connecting the two metal catches.
When re-assembling, ensure the opening mechanism works (both locking, and opening) before trying to reassemble the cover and handle (the metal bar is fiddly to line up and needs a sharp tap to locate it into the far side, but not too sharp as it can go too far in, making the handle stiff to close). Ensure the cover is slid into the mounting lugs and ensure all the screws are refitted (I missed just one inside, hence having to take it all apart again).
Weirdly, once re-assembled the whole mechanism, including the sliding pannier release bars, was much easier to operate.
So - it is possible to re-key the newer panniers. once you know how it works, then it should take about an hour to do one pannier.