Guys, got a really strange problem here.
I've just installed a fresh Fedora 16 image, and on June 2nd at around 10:30am I ran a "yum upgrade" and let things take their course. I locked the screen and walked away. Came back and I couldn't unlock my screen - logging into the console also failed.
I tried doing a couple of checks, here are the symptoms:
1) Logging into the console fails for both root and my user. I have checked, the passwords are exaclty the same as before.
2) selinux was in enforcing targeted mode when I ran the update - I have moved to permissive, but still fails.
3) I can change grub to boot into single mode, and my root shell opens. I can set passwords here. However, this is where the interesting bit happens:
If I change the password of "user" to "passw0rd_5736!!_!" while in single mode, the command succeeds. If I then test it while in single-user mode but su - user, then try to "su - user", that same password fails.
If I su to "user" from the initial root prompt and run passwd and change the password, it succeeds until the final entry, where it gives a "passwd: Authentication token manipulation error" before returning - however the password in /etc/shadow does change.
Here's the really strange part. When I "init 5" and try to login with GDM, the login succeeds with the new password!
Sounds like a PAM problem, but I can't figure out how to troubleshoot it. As an FYI, the system is now in SELinux permissive, not enforcing, so SELinux shouldn't be causing the fault.