I'm not using the script but I am using same procedure to burn encrypted media 
(CD-R and DVD-R).
The same thing happens: gnome prompts-me for a password; after I provide the 
correct password it gives-me the error dialog: 

"Unable to set up crypto device

Error org.freedesktop.Hal.Device.Volume.Crypto.SetupPasswordError

Error setting up /dev/scd0 - bad password?"

Clicking close brings the password dialog again.
After closing the dialog I can mount it manually without problems.

I'm using Ubuntu Desktop 7.10 (Gutsy), all patches applied.

-- 
LUKS-encrypted CDROM / DVD ROM are detected but mounting fails
https://bugs.launchpad.net/bugs/122241
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