1. Boot the affected machine from the Windows installer disk
2. Use "Repair options"
3. Click through to the option to spawn a shell
4. It will now ask you for unlocking the disk with a recovery key. SKIP THAT.
5. In the shell, type: "manage-bde -unlock C: -Password", enter the password
6. The drive is unlocked, now go and execute whatever recovery you have to do.
Good luck.