Ok this is a way around the FATAL::Unable to process request issue that worked for me.
I have a windows based OS.
Login into you ICloud account & ITunes account through a web browser not on your IPhone or through ITunes. Verify that you can login in using your normal Apple ID. (This is step is just to verify that the Apple ID is not disabled and that you are using the correct password after trying to reset it through the default ITunes steps)
These are the links to verify.
https://www.icloud.com/
https://appleid.apple.com/cgi-bin/WebObjects/MyAppleId.woa/
Once you have verified that everything is accurate.
Login to ITunes using your Alternate Apple ID
Either your example@me.com or example@cloud.com
The example@me.com worked for me.