How do I remotely unlock Google Device Manager remote lock when I know the password?
There is no method for unlocking in google device manager, but, you could try setting the password to password, and setting the text as, 'the password is password'.

However, if you can't contact the phone, it is probable that they have wiped it an set up their own google account.

There isn't much you can do, except, tell the police your IMEI number, they probably have a database of lost and stolen phones.