Sorry to reopen this, I've just tested in in two different up-to-date
systems using Lucid RC, same issue: changing another user's password via
System > Administration > Users and Groups effectively locks out
account. Changing it back to the original password from command line
(via console) worked for me.

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ecryptfs Private directory not mounted after changing password in users-admin
https://bugs.launchpad.net/bugs/307019
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