The password is programmed into the radio with the KPG-111. It can be programmed to require password for reading, or reading and writing to the radio.
Whoever programmed the radio put their password in. I do this on all our NX-410's and NX-900's due to issues we've had in the past with shops adding radios to our trunked system without our knowledge.
Kenwood has a version of the KPG-111 that will bypass this password. Rumor has it that it's out there, somewhere, but I don't know for sure where to get it. A Kenwood shop would likely be able to help you, but be prepared to explain and prove where you got the radio from, just in case.
I don't have that version of software. I don't know anyone who does. The surest way to solve this is to take the radio to a Kenwood shop and explain to them what is going on. They may be able to help you, or they may be able to send it back to Kenwood.
Good luck!