I have solved the problem. Somehow my /etc/shadow file got in group "root" instead of "shadow" which caused /sbin/unix_chkpwd to not be able to access it. I have changed group to "shadow" and now it works OK. But I do not remember playing with groups on shadow, some tool must have done it.
BTW. It seems kcheckpasswd is not using kcheckpasswd PAM file. ** Changed in: Ubuntu Status: Needs Info => Rejected -- Cannot unlock screen in Kubuntu https://launchpad.net/bugs/45411 -- ubuntu-bugs mailing list ubuntu-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/ubuntu-bugs