Selecting 'Display Gallery on page load, user needs to click on the "home" button to show sidebar and content' and giving the post a password results in a broken portfolio item; In the portfolio the item appears as usual with a padlock. When entering that portfolio item the page is blank.
Caveat: If you've previously entered the password for that item (before choosing the 'Display Gallery on page load, user needs to click on the "home" button to show sidebar and content' setting) then the portfolio will work as expected.
Removing the password the portfolio item works as expected. Setting Instant Background Gallery back to 'Display Sidebar and content on page load, user needs to hide it manually' the portfolio item works as expected.
When the page is blank, viewing the source reveals that the HTML is there, so it looks to me like the password protection javascript removes the bottom bar (with the option to show the sidebar+content), and the 'Display Gallery on page load…' option removes both the sidebar and content area, despite the fact the content area is needed at this point in order to request the password. The result is a completely blank page that the user cannot enter a password into in order to progress.
The code to hide the sidebar+content should really take place AFTER the password has been entered, i.e. when displaying the gallery. Not before.
Create a new thread and tell me what problems you are encountering and what you want to know. 
There is no step 3 :) 
