Hi,
while this is 3 years old, i just stumbled across this problem today with another VPN setup using username and password. So long story short, for whatever reason pfsense is removing the last line in the user/password file when openvpn client is executed. This results in the above error message.
To fix this issue:
1.) connect via ssh to your pfsense and choose to start shell
2.) find your user+passwordfile in the openvpn directory (/var/etc/openvpn/), for me it is the file:
/var/etc/openvpn/client1.up
3.) If you open it with cat for instance it will only show the username and an empty line
cat /var/etc/openvpn/client1.up
myvpnusername
4.) Simply add in a new line after the username the password and save the file so that the file looks like
myvpnusername
myvpnpassword
5.) Now the important step, make the file immuteable. If you do not do this, the password will be removed again. Execute:
chflags schg /var/etc/openvpn/client1.up
6.) re-check that username and password are correct
cat /var/etc/openvpn/client1.up
myvpnusername
myvpnpassword
8.) Go in the webinterface to Status->OpenVPN and Start the service.
9.) Should run now.
Happy VPNing
ng23