Once you started into Moodle2 password salting also came into play, it sounds like you have not brought that along with you in the upgrades.
Check out http://docs.moodle.org/22/en/Password_salting
it may help.
John
Installing and upgrading help
Username and Password issue after migration
གྲོས་བསྟུན་འདི་བསྡམས་ཡོདཔ་ལས་ ལན་གསལ་བརྐྱབ་མི་ཚུགས་