http://www2.ca3.uscourts.gov/opinarch/153537p.pdf
Despite Doe’s refusal, f orensic analysts discovered the password to decrypt the Mac Pro Computer , but could not de crypt the external hard drives. [...] The Forensic examination also disclosed that Doe had downloaded thousands of files known by their “hash ” values to be child pornography. 3 The files, however, were not on the Mac Pro, but i nstead had been stored on the encrypted external hard drives. Accordingly, the files themselves could not be accessed.
A little concerning. Does the FBI have an undisclosed FileVault backdoor?
> Despite Doe’s refusal, forensic analysts discovered the password to decrypt the Mac Pro Computer, but could not decrypt the external hard drives.
So either the Mac Pro had a weak password or Doe had it written down somewhere. It's rather unlikely that the FBI has a zero-day for FileVault.
The value of this case to them isn't decrypting the data -- it's in setting a precedent on forced data decryption, which they can then use for other cases.
Someone quoted this in a post below: "Prosecutors said Rawls has a lot of "chutzpah" to even ask to get out of jail while he appeals the contempt-of-court order to the Supreme Court, which has never decided whether forcing somebody to decrypt hardware amounted to a Fifth Amendment violation.", proving the point.
So it really looks like they've got plenty to convict this guy on the evidence they have, but are refusing to bring the case to trial until he unlocks his external hard drive for some reason.
I think the specifics in this case, Like the sister's testimony, go against the second possibly weakening their argument.