Found it - at least part of it. I am accessing using IE9. Under "tools/compatibility view settings" the item "Display Intranet sites in Compatibility view" was checked - and this site is intranet (inside our firewall). Your suggestion to view the console in the browser led me to this - so thanks for the help and sorry to bother you with something that was totally client/browser side. This fixed the repeat password issue - that is working perfectly now.
The login still hangs though (no change noted there). If I wait long enough I get the error noted earlier. If I only wait say 30 seconds and then hit refresh it goes to the admin page. So the login is working it just isn't refreshing/redirecting. I have not found anything in the logs (although I am not quite sure what I would be looking for - or where).