are you able to telnet to the ip of the handset and enter the password?
is this just a password error thing?
have you tried the default password if it is different from what is in your config file?
have you defaulted the handset using this method:
1. Unplug the power cable from the phone, and then plug in the cable again.
The phone begins its power up cycle.
2. Immediately press and hold # and while the Headset, Mute, and Speaker buttons begin to flash in sequence, release #.
The Headset, Mute, and Speaker buttons flash in sequence in order to indicate that the phone waits for you to enter the key sequence for the reset.
3. Press 123456789*0# within 60 seconds after the Headset, Mute, and Speaker buttons begin to flash.
If you do not complete this key sequence or do not press any keys, after 60 seconds, the Headset, Mute, and Speaker buttons no longer flash, and the phone continues with its normal startup process. The phone does not reset.
If you enter an invalid key sequence, the buttons no longer flash, and the phone continues with its normal startup process. The phone does not reset.
If you enter this key sequence correctly, the phone displays this prompt:
Keep network cfg? 1 = yes 2 = no
4. In order to maintain the current network configuration settings for the phone when the phone resets, press 1. In order to reset the network configuration settings when the phone resets, press 2.