This worked! Thanx
Thanx
Thanx
I had lots of problems with keychain as well after installing Yosemite. Keychain turned itself off on all my devices, and wouldn't turn back on with the security code/SMS combination. The option to authorise from another device wasn't available after setting up the security code.
I've managed to get it working again by resetting Keychain on the Mac (in Mavericks), and choosing NOT to set up a security code. This restored the option to authorise Keychain on iOS devices from the Mac rather than using the Code/SMS method. It has re-synced my passwords from the Mac to iCloud, so hopefully I won't have lost anything.