Why does OS X show a forgot password prompt when trying to boot or wakeup screen?
Brian's answer was right on. The issue in my case was related to the backlight. Here's how I got around it:


While the password dialog is up, move your mouse cursor to the top of the screen until you get an apple menu.
Select "Restart" from the Apple menu
Use a flashlight to shine a light through the Apple on the back of your MacBook screen and you should see that the computer is on, but the backlight is not. 
Use the right and left arrow keys to toggle between accounts and hit enter to login on the one you want, using the flashlight to see what you are doing.
Once logged in, the backlight should function normally.


I have not determined the root cause yet.