I made my first commit to fossil in a long time, and started from a fresh clone.
1. So, to be able to push I did:
     fossil push http://aku@www.fossil-scm.org/fossil
     typed the password, and of I went.
   OK

2. Later I ran
     fossil update
   and got back:
    Autosync:  http://aku@www.fossil-scm.org/fossil
                    Bytes      Cards  Artifacts     Deltas
    Sent:             193          3          0          0
    Error: login failed    fossil: 
   BAD

3. I should note, when I do a
     fossil pull
   I get asked for the password again, and then the pull works.

I suspect that something is wrong with the local password storage, or how it is used by the transfer code. ... Looking into the user table fossil has stored a HASH of my password ... The last-sync-url contains my user name ... Oh, it is some mismatch between client and server about password vs hash usage.

While this can have a severe impact on usability I decided to set the priority of this ticket only to important because of 3.

Last note: I ran a 'fossil rebuild' and then the above again, this had no effect on the problem.