Thank God! I thought I was the only one. This is the first post I've seen on this topic. I've reinstalled the OS at least two times a day since launch. Of course it took my stupid brain this long to figure out what was locking it up.
Anyway i've done some testing and at least in my case the lockup with a incorrect passcode only occurs when i have it connecting to my exchange account. If i simply set it up without exchange i can get the password wrong as often as i want.
Anyone have any ideas... do we just wait it out or is there something we can do?