"Anyone know what happened here and what I should do?"
Some table in the kernel security subsystem is messed up but I can only guess as to which one. Take a look at /etc/passwd and look for the entry which has that users UID as the third field in the entry. The first field should be the user name and the second field (password) should be an asterick. If either the user name and/or asterick is missing then that is the problem.
To fix the problem I recommend that you back up /home/username and then delete the user using the userdel command (see man userdel). Then recreate the user with useradd. If you still have problems then try deleting the user and then creating a new user name.
"Can I report this without knowing exactly what I did to cause the issue?"
First you should search the Mandrake support site to see if the bug is already reported and if there is a fix for it. If not, you can report it. But unless you give the developer enough information that he can recreate the bug then he cannot fix the bug.
Be prepared. Create a LifeBoat CD.