I can confirm this. I noticed that if I enter my password before
network-manager renews wifi connection, everything is fine. But, if I
don't enter my password that fast, in the same time when network-manager
renews wifi connection (can be seen by a flash of a notification in
upper right corner, even if screen is locked), I get time out.

This was the case in Dapper and is also in Edgy.

Do you guys also run network-manager?

-- 
Password rejected due to timeout after resume
https://launchpad.net/bugs/40022

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