...still not sure why you need the actual password. I'd argue WP should be deferring checking password to SMF or vice versa.
The plugin uses (includes) wp scripts "saveged" from wp installation path to create users, if they are not found in wp.
The $_POST['passwrd'] value is used as argument in wp_create_user function, as is.
The strange thing is that this value was not empty some days ago... Users were created without problem.
I only changed thigs in my tamplate - but I didn't see login - related parts.