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Web Services Authentication Problem with Specific User IDs

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We have an application that integrates with Microsoft Dynamics CRM online via the API.  User provide their credentials through the integrated app, we use the method described in this article for authentication-

http://msdn.microsoft.com/en-us/library/hh675404.aspx

This works fine for most users.  However, we've run into a problem where some users fail.  This appears to be due to them having a special character like ! $ # in their password.  In this case when we try to authenticate we get back a 443 error and in the response we see Authentication Failure with error codes 0x80048823 and 0x80041010 along with detailed message saying that the credential is blocked.

Information we found online indicates that this is probably tied to the special chars in passwords.  So we've asked users to change the password.  The problem is that our users can't seem to change their password and have it sync appropriately across Dynamics and LiveID.  They change their password for Dynamics, and that works fine for them logging in through the browser, but those changes don't seem to be sync-ed with the LiveID that the web services use, so our authentication still fails (with the new password).  We've asked users to go to live.com and change password there too, but so far this hasn't proved successful either.

Has anyone else run into this, and if so can you provide either:

- Instructions on how users could change their passwords to remove special chars that would end up fully sync-ed across LiveID and Dynamics so they can login successfully directly to Dynamics but so our web service authentication will also work?

- Some other way for us to do web services authentication that would get around the failures we're experiencing?

Thanks-

 


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