Can't login following upgrade

Lion upgrade went perfectly until I tried to logon following the upgrade and none of my users will accept their previous passwords so I can't login.

I can't start recovery mode as there doesn't appear to be one installed, holding down the option key only shows one partition: Macintosh HD. So much for internet recovery.

Single user mode doesn't work because I have an EFI password and I can't remove it because I would need access to the OS for that - what a disaster.

Unfortunately I no longer have access to my 10.6 installation DVD and I'm not sure it would help anyway.

Apple, why aren't passwords compatible between 10.6 and 10.7 ? It looks like it is too soon to give up on installation media, as I have no resolution to this problem without a bootable Lion DVD.

At the moment, I'm faced with asking a colleague to create a bootable Lion DVD and then attempting recovery with that. If it doesn't work then I can boot into Ubuntu and copy my user files off onto an external HD and then try a clean install - not the best £20.99 I've spent.