GameFly seems to pass the buck and their FAQ says:
Your game activation is supported by your Game Publisher. GameFly Customer Support does not have access to assist you with this activation.
However, if it's a Steam game, and you activated the game on your Steam account, there's no going back - it's permanently yours. You can't trade the game if you've activated it to your account. Trading only works with gifts that you've not activated on your account already.
I think the exception to this rule is in European countries, there might be a short-term "out" due to the laws being different there. I don't live in Europe so I can't really comment on how this would change the situation. I also don't know how the GameFly involvement would complicate things, but I'd suggest contacting Steam Support if you're a European gamer.