Sounds bad badgery. However, to get over the password request, you could try to reset the CMOS by changing the relevant jumper on your motherboard (it will be a couple of vertical "pins" that you have to place a small plastic "jumper" over and then remove). Do you have the motherboard manual by any chance as this should have a diagram which shows the position of this jumper (if present).
When this is done, it should clear the CMOS in the same way as removing the battery. Your description of the battery also sound unusual (to me). Most motherboard batteries I have seen are the large, coin-like, watch-style batteries (about the size of a 10 pence coin, but as thick as a 1 pound coin, and silver). It's usually just a case of carefully prising it out of its holder with a fingernail.
However, I'm not sure if reseting the CMOS would help with the password issue.
Any more knowledgable forum contibutors any better advice?