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Welcome to 11g security.
Disable the password case sensitivity at the instance level. Connect as SYSDBA and run
Also, 11g passwords expire after 180 days. http://docs.oracle.com/cd/B28359_01/network.111/b28531/authentication.htm#i1007339. If that bothers you then fix that as well (google for solution).
ALTER SYSTEM SET SEC_CASE_SENSITIVE_LOGON = FALSE SCOPE=BOTH;