We reset passwords to all our client orgs every week so every Monday, I do the update-password dance with TWS. Not a big deal.
Today, I had 2 copies of TWS running. One that was to a solution with a single project/org was normal - I get the invalid-creds popup, I close the popup and update the project Properties with the new password, all is good.
On the other TWS, I had a solution with 2 projects. I get the popup but can't close it. I tried rebooting but that didn't help and the only way to close TWS was by shooting it in the task manager (or reboot). Eventually, I manually edited the solution file in notepad to remove one project and that allowed me to get into TWS and update the password.
I think this is related to the new version since I've had solutions with multiple projects for months.