WiFi invalid password on iPhone 3GS

Recently, my iPhone 3GS started showing a new bizarre behaviour.
When we enter the password to join a WiFi network, we are getting the following pop-up everytime:
Incorrect password for "WirelessNetworkName"
This has just started recently.
System Info:
Version 6.1.3 (10B329)
Model MC143C/A
Model Firmware 05.16.08
Tests we have tried:
   * connect to home LAN with password - Fails
   * connect to iphone 5S personal hotspot with password - Fails
   * connect to hotel LAN with a password - Fails
   * connect to LAN without a password - Succeeds
Debugging steps attempted:
  * I've tried a hard reboot - no change
   * I've tried a Reset -> "Reset Network Settings" - no change
I guess the next step is a full system reset/restore unless anyone else has any ideas.
The iPhone3Gs is otherwise appearing to be fully functional and has worked for many years.  This really feels like a software bug with a recent Version update (speculating).

Given what you've done, there are only two things left: 1. Settings>General>Reset>Reset All Settings, or 2. Restore your phone. Try the reset all settings first. This will delete all WiFi passwords, bluetooth pairings, you'll have to re-activate FaceTime & iMessage, as well as change any other settings you altered.

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