Dear Zev, as LASER pointed out, Lang's Proposition 6.11 indeed solves your problem. Still, I'd like to add two remarks that might put your problem in perspective.
A) Given a field $K$ and a group of automorphisms $G$ of $K$ we get a fixed field $K^G$ and an extension $K^G \subset K$ . This extension is algebraic if and only if all orbits of $G$ are finite and if this is the case the extension is always separable: each element of $x \in K$ has as minimal polynomial over $K^G$ the product $\prod \limits_{y \in Orb(x)}(T-y)$. [Let me emphasize that i) there is no base field $k$ in this general statement and ii) the group $G$ may very well be infinite with all its orbits finite: every infinite dimensional galois extension gives an example.]
B) The statement is false if you don't assume normality of $k \subset K$ (as I'm sure you guessed!). Here is an example taken from Bourbaki's Algebra V, exercise 3) for §5.
Take a field $F$ of characteristic $p>2$ and define $k=F(x,y)$ where $x,y$ are indeterminates. Let $\theta$ be a zero of the polynomial $P(T)=T^{2p}+xT^p+y$ (in an algebraic closure of $k$, say).Then if we put $K=F(\theta)$$K=k(\theta)$, we have our counter-example: no element in $K$ is purely inseparable over $k$, except if it already is in $k$. And yet $K$ is not separable over k since the minimal polynomial of $\theta$ over $k$ is $P(T)$ , which is obviously not separable.