I got the same issue as chanchac. I use Acrobat Pro XI to do the encrypt the form with compatibility as "Acrobat X and later" which leads to a 256-bit AES encryption.
And then I use LiveCycle ES3 Server 10.0 to do the reader extension. But I got the same message "Please enter a password that will unlock these documents or choose skip."
I know this issue would not happen if I choose the compatibility as "Acrobat 7.0 and later" (128-bit AES encryption). But my company decided to support Acrobat X and later only.
Please help to provide some solutions or alternatives... Thanks.
Many appreciate if anyone can help!