Comment 3 for bug 318286

I am seeing very similar behavoir. I recently updated to the latest jaunty packages as I generally do a few times a week. After a reboot, the wireless connection entry for my hidden SSID WPA2 Personal access point now refuses to connect. I'm convinced this is a bug somewere as this has been working for me quite well for the past few months. Here are the steps I've performed:

1) Deleted the wireless connection entry associated with the AP (lets call it AP_FOO).
2) I'm running a WRT54-GL Linksys router with the tomato firmware. I enable broadcast in the router setup.
3) Disable and enable wireless in the network manager applet (Gnome).
4) Select the (currently visible) SSID AP_FOO, enter the WPA2 Personal SSID.
5) A connection is instantly established and I am notified of this.
6) Internet is now working fine.
7) Disable wireless in NM.
8) Disable broadcast in my router config.
9) Enable wireless in NM.
10) No longer see AP_FOO in the list of APs in the NM dropdown, so I select 'Connect to Hidden SSID'.
11) Pick AP_FOO to connect to.
12) After waiting a considerable amount of time, no connection is made.
13) Eventually a dialog appears that contains my WPA2 passphrase, I click 'connect' as the passphrase is the correct encrypted version
14) The same dialog appears again, and again I click connect
15) After a while a new dialog appears asking me for a new passphrase, but this time for WEP and not WPA2 Personal, the same behavior as the original reporter notes.

Some system details:
$ apt-cache policy network-manager
network-manager:
  Installed: 0.7.1~rc1+20090220-0ubuntu1
  Candidate: 0.7.1~rc1+20090220-0ubuntu1
  Version table:
 *** 0.7.1~rc1+20090220-0ubuntu1 0
        500 http://us.archive.ubuntu.com jaunty/main Packages
        100 /var/lib/dpkg/status

$ lsb_release -rd
Description: Ubuntu jaunty (development branch)
Release: 9.04

My wireless hardware:
description: Wireless interface
product: Wireless WiFi Link 5300
vendor: Intel Corporation
03:00.0 Network controller: Intel Corporation Wireless WiFi Link 5300

I'm running on a Lenovo X200.