The system is asking for the file's password, not the server's. I've seen this on my files as well. If you enter a valid account name and password, they should go ahead and open the file with out trouble. In the case of some files, you may have to enter "Admin" as the account name, leave the password field blank and click "OK". (That's if there was no password set on the original file.)
In one case, one file insisted on asking for the other file's password every time a script referenced it even after I had correctly updated the external file references and even though both files had identical sets of account names and passwords. I found I had a corrupted file. Once I fixed the corruption, things worked just fine.
I strongly recommend that you open your files in FMP 10 and use File | Manage | External Data references to clean up all your external file references. When I first converted my files, I found an unbelievable amount of garbage in my external file references as well as a lot of unneeded duplication.