If the WiFi networks are being reported, then the driver is likely working fine. The Network Manger timing out usually mean some form of mis-configuration on its part. It might not be just password issue. It happened to me lately that I tried to connect to network, that did not provide IP address via DHCP. It ended with network managed timing out and dropping the connection.
Please double check your network setting, maybe even remove and set up the network again.
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