I just spent some time with paturtles on IRC because he had the exact same issue. In the end, this was the best test we could do to prove it was his account that had the issue, and not any related software.
We closed down innerspace completely.
Log into the game "normally" (IE: Via Launchpad). Once in the game, type: /camp login
Once at the login screen, try to log in. You will get the login rejected.
You can try with an account that isn't bugged, and it will work fine.
I suggested he petition on his account with exactly the details above. Saying he can't login from the login screen, and explain how he got there (log in normally then /camp login).