Comment 4 for bug 314623

I tested by disabling the network (unchecking "Enable networking" on the network manager applet in GNOME). I've also done it by simply unplugging the network cable.

I used 'su - $USER', using a gnome-terminal session while logged in to the GNOME desktop.

One incorrect, then one correct, allowed me to log in (using cached credentials).
Two incorrect, then one correct, allowed me to log in (again, using cached credentials).

Three incorrect, then one correct, did not allow me to log in, giving the above error.

'sudo -i' gave similar results, although it prompted multiple times for the password at one invocation rather than simply reporting 'Authentication failure' at the first failed attempt on each invocation.

In both cases, a correct password on the fourth or greater attempt will display the error.