thank you for taking time in filing the bug to make ubuntu better.
i guess your seehorse (key and password) lost during the updates so that why it 
was saying the authentication failed.
have you checked that your password and ids are saved there in the seahorse ?


** Changed in: empathy (Ubuntu)
       Status: Confirmed => Incomplete

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https://bugs.launchpad.net/bugs/1005105

Title:
  Empathy fails authorization after restart in ubuntu 12.04

Status in “empathy” package in Ubuntu:
  Incomplete

Bug description:
   Hi Experts,

  I have ubuntu 12.04 upgraded from 11.xx. I have empathy 3.4.1 installed and 
configured to google talk account.
  It works fine for first time, account details are entered in empathy.
  But, let us say i restart my system. Empathy fails to authorization. Even 
after i select save password.
  Even after correct password is entered after sysem restart, for empathy it 
fails to authorize. again i have delete the account and link the account to 
empathy.,Then it works fine.

  I have tried ussing password and keys and deleted empathy account login 
details.
  But it is of no use, if i restart my system.
  regards

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