When creating instances with Debian 7 images on Linode provider, I was unable to login using generated password, I review API calls and seems ok to me, so I opened a ticket with Linode support team.
This is the response from support:
== start here ==
I have determined the source of the issue you are experiencing. If you decode the encoded string you're sending for the root password, you'll notice that there is actually a newline (%0A) on the end of it:
>>> import urllib
If you take that string and test it with crypt, you'll see that it does in fact match if the newline is included:
>>> import crypt
>>> crypt.crypt('bPJ/Y+Ty/CU=', '$1$e5348d91$X/u/q7slmZPgFioKx0aFm.')
>>> crypt.crypt('bPJ/Y+Ty/CU=\n', '$1$e5348d91$X/u/q7slmZPgFioKx0aFm.')
As you can see, the newline on the end of the password is included in the hash and a normal login session doesn't capture a newline as part of the password. The quick fix is to strip the newline off before encoding the password to send in the URL, like so:
root = binascii.b2a_base64(os.urandom(8)).decode('ascii').strip()
Making that change should fix your ability to log in using a password after deploying a new Linode. Let us know if you need further assistance.
== ends here ==
Tested and worked!. Just adding newline strip on root password generator.
Hope that helps
Juan Carlos Moreno