Please note that the Wireless Network Password input field on the Libratone AirPlay Setup screen automatically suggests an uppercase first character in Safari. Auto-Capitalization is enabled in the password input field.
If the first character in your Wireless Network Password is a lowercase letter, please manually disable uppercase on the first character by pressing Shift.
Bottom line: "Password" and "password" are two different passwords. Upper- and lowercase versions of the same character are considered different.