Well, I used your initrd and I get the same issue. (The keyboard issue as usual, I'll just use a different password to accomodate). On the computer where the keyboard did work fine, the first password worked perfectly, but then once again, the second password prompt waited no more than 8 seconds before continuing to boot. It just bypassed it. (in fact, typing my password just showed up on the screen, so it's not even expecting one.
Not sure what log I should check (can't find casper.log...if it's even relevent), to see what the error is, because unlike at the last password, backtrack can continue booting without accessing the changes partition, so maybe it's an unrecognized UUID or something.
I'll update back when I have a different password..one that'll work on my laptop, because who knows, it could be a individual computer issue again (all three of the computers i've tested on have given different results haha).