in 4.1.1, we added a hidden item p_page_checksum, for security reasons. This item contains a session dependent checksum over the items that should be submitted. Since your custom form does not contain the checksum item, the submit request causes this error. The checksum value not be computed from outside, either. That's probably bad news for you, but this option of an external, custom login form does not work anymore, sorry.
Given the changes that Christian describes, if you can't redesign this part of your application, I think your next approach is to use an iframe to include the login form on the page.
This will allow you to include page 101 (or any page number) to be your login section. It can look exactly as your current solution, but the iframe will allow that page to submit on it's own without affecting the existing page.
The challenge then becomes escaping the iframe. One way to do this is by setting the window.location.href, but there are other ways.
This thread will give you some ideas Problem closing Skillbuilders modal page when using Login page 101
Christian, many thanks for all your response and as I suspected this "feature" was locked down in APEX 4.x.
Jorge/Tom, very interesting ideas to take away with me so...thank you.
Just to give more information on this, the reason this redirect was done in the first place was because the host site was third party and we had very little influence over how this feature was implemented. Apart from providing the APEX login form code there was little more we could do and there was no need to come up with a "clever" alternative.
Anyway, thanks again to all,