I got this error while trying to Logging In to the Web Services Session using .NET. Spent whole day for finding out what could be the reason behind the issue. Finally came to know the issue was because of the username being not passed correctly.
The username that we were passing was in this particular format that we would normally do
‘orgname-devusername’
Whereas it was expecting it in this format
‘orgname-dev/username’
i.e. forward slash instead of the back slash.
I hope it helps!
Nishant Rana's Weblog 