I recently upgraded all my accounts to a 30+ character pass-phrase.  I can
go to a console and login fine without any problems, but when I'm in
runlevel 5  (using gdm) and I try to login using the same names and
passwords, it gives me "authentication failed".  I double and triple
checked the password and I've probably tried to re-type it about 20 times
now.  So, I decided to change it back to the old one -- a 8 character
password - voila!  It works.  So, please feel free to email me or call me
if you'd like to hear the exact passwords I'm using.  There are a capital
letters, spaces, and a period in the password.

Good luck, and sorry I'm not a coder, or I would have tried to hunt this
down myself!  Please don't hesitate to contact me if I can be of any help. 
My contact info is below

Daniel Whitener
(800) 688-3067 ext 104
opie