Thanks a lot for pointing me to the other threads. I am relieved that is not a serious problem that concerns only me, instead it is a known bug that could be solved. I am currently at work but I will try your advice using Breadwallet to restore and Electrum as MultiBit alternative when I come home later this day.
Your password problem is a well known bug. If you search through the old threads here you will find many of them are about the password bug. The simplest solution to it is to install bread wallet onto your phone and create a wallet in it using your multibit seed words. Even multibit support suggests that solution.
There are other solutions, but that's the easiest. The multibit devs have known about the bug for a long time and don't appear to be about to fix it any time soon. I would switch to using the electrum wallet after getting control of my coins back through bread wallet.