Try this....
1. Stay on the log in screen.
2. Go to your Microsoft Hotmail account, log in and change your password from there.
3. Enter the new password on the login screen.
You should be able to to create a new local account and access the computer.
Another option/fix...
When you are on the login screen do you see a little "ENG" on the lower left corner of the screen? Hover over this and you should see a button you can click. When you do so, it should show you the keyboard as using the default American English keyboard layout. Which if you are not using that normally, then this would become a problem when trying to log in. Change the setting to the correct layout and you should be able to log in.