Unfortunately, I don't have really much thing to help.
Your problem seem to me very bizarre ! :?
You probably tried to disconnect Hotmail user, and after that reconnect, using your password. If not, you may try it.
Another idea: Did you make recently any keyboard configuration, (maybe to another language or country), which might apply another password while you're hitting yours?
Are you using one or some keys in the numbers part in your password? If yes, you may need to have a look on "Lock Numbers" key to put it on! (I mean to see its' light on, on the keyboard.
Well, apart of that, I don't have any other thought. Sorry !
Maybe some others will be able to direct you to a better eventuality.