Dear @ksmarsh
Yes Password protection plugins can be difficult sometimes, however because it is a hot topic and lots of people have had varying degrees of success in the past have you looked into older Forum threads to see if anything suits you needs?
http://laythemeforum.com:4567/search?term=password&in=titlesposts&matchWords=all&sortBy=relevance&sortDirection=desc&showAs=posts
Also:
http://laythemeforum.com:4567/topic/3711/password-protection
Unless it is a specific bug that needs fixing with Laytheme at this point i apologise that this is all i can offer as a solution
Thank you for your patience and for using Lay Theme and sincerely
Best of luck
Richard