Time Machine restore password problem

Question

I had my HDD replaced by Apple. Was running latest Lion OS version before the fault, and had fully backed up with Time Machine. Booting up the iMac with the restored Lion was going well. Had selected restore from time machine. Then i was asked for my password. I know 100% that the password i entered (several times) is correct. There isn't any possibility at all that it is wrong but my iMac will not proceed further saying the password is wrong.
As I can't get past this stage I cannot access anything including the operating system - I can't get to the desktop even without any data. So I cannot get to any Lion recovery partition either. Have tried Lion interent recovery but that simply hasn't worked. Apparently I didn't purchase Lion through my Apple ID - utter rubbish. I've tried every Apple ID that I have used and no records of Lion purchase in any of them - how the **** did I download it and use it for ages then?!!
I bought the iMac originally with Snow Leopard so have that install disk but it seems I can't go back to that.
Going back to the apple store is a real pain the proverbial.
I am happy to wipe the HDD completely and start over, with Snow Leopard then pay (again) for Lion and then copy across the data I need from Time Machine manually and/or thru migration assistant. So here's the main question: How should I do that - wipe the HDD when I have no access to the desktop?  I guess I'm going to have to boot up using Cmd C or similar and then type in some code. I have no experience/knowledge of that code so any help will need to be idiot proof please!.

Answer 1

As I had a brand new HDD installed by the Apple store this was the sequence of events (slightly different from the original post due some new info):
1     The external HDD which was the original Time Machine back up was plugged into the firewire port.
2     Booted up (as normal) for the very first time to be met with a fresh installation process just the same as when you buy an entirely new iMac - setting up language etc.
3     During that set up sequence I was asked if I wanted to restore from Time Machine, I selected that option.
4     About 3 hours later, c450GB of data is seemingly successfully loaded from the Time Machine external HDD to the internal, new HDD
5     The only option I now have available on screen is to log in using the same password as had on my original set up (before the internal HDD replacement). The forgot password hint is available, and clearly indicates that I should be able to enter my password to move, but no matter how many times I input the correct password (and, just in case, all other possible password options each with all conceivable varieties of CAPS on and off etc.). Nothing is accepted. No option to go backwards (eg uninstall the restore or anything else), and no ability to get to the desktop.
6     Several expletives later....I decide the only option is cmd+R reboot, internet recovery....and this is the udpate from the original post....
7     I'm in the UK and I try doing internet Lion recovery at about 11pm UK time. Indications are this will take 4+ hours. The trick is, I have now discovered, instead, if based in the UK at least, is to try this at 6am (when most people in the US will be asleep) and it takes about 10 minutes!
8     That brings up a chance to recover the "OS X". Great I think, just enter my Apple ID....error: "This Apple ID did not buy Mountain Lion"...cannot proceed. Mountain Lion? Where was the Lion only option? Doesn't exist seemingly. (Q: has Lion internet recovery been withdrawn? If not how on earth does one get to it?) BTW, I cannot see any partition on the internal HDD with the Lion recovery.
9     However, with the failed internet recovery (inviting me to install Mountain Lion, if only I'd actuall bought that before, but no option to select Lion or buy Mountain Lion there an then!), what I do get is a menu option to "Choose Startup Disk". "Choose the the system disk you want to use to start up your computer". One icon is there...my internal HDD...BUT I see that says "Mac HD OS X 10.6.8" - what? That's Snow Leopard, not Lion. I bought my iMac (from new) with Snow Leopard then upgrade to Lion when that came out. On the original set up (step 2 above) there's nothing to indicate what OS is running. I just assumed that as I had Lion the Apple store would have reinstalled Lion when the swapped by HDD. Likely then this is not the case. V annoying Apple Store (Brent Cross, London!). Idiots.
I guess there's a possibility that my Time Machine restore won't work because it is a Lion based backup.
Not had time to do this next step yet but likely to be my only option before admitting defeat and driving to the store again...internet recovery, get to disk utility from there, wipe the internal HDD and load Snow Leopard from the installation CD I still have (phew). BTW have tried to cmd+C and boot from the Snow Leopard CD. No joy..just ejects. Doesn't want to know!
If you've got this far..thanks for your patience. Thanks even more if you've got any ideas.