I already answered your support ticket but I will write my reply here, too, for others who have the same requirement.
When the TextMode property of an ASP.NET TextBox is set to Password the value in the field is displayed as bullets. It is actually by design to prevent the unmasked password from being displayed in the HTML source of the page. The workaround is to have a separate label positioned over the TextBox. It can be hidden and shown depending on same criteria and use it as an error message as in your case. I prepared a sample where I used the Label as an empty message of the TextBox and attached it to this message.
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