I just tried it, had same error message. Perhaps there is a variable that must be changed? hmm. Here is an easier way to get access if you know your old username
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http://forums.mactalk.com.au/13/51668-ever-lost-your-mac-os-x-admin-password-her es-how-reset-without-cd.html#post538727
It's a lot easier than that if you know the user name!
1. Reboot
2. Hold apple + s down after you hear the chime.
3. When you get text prompt enter in these terminal commands to set your password
mount -uw /
passwd
username
You will be asked to enter and confirm a new password.
4. Reboot, and login. You may need to reset your keychain, but apart from that, you are good to go.
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