i've the same problem "Unable to Generate Hash" moving the site from local dev enviroment to web server running PHP 5.3.8
upgrading PHP to 5.4 is not an option.
not a solution, but a simple workaround:
1. installing PW on the web server and creating users
2. moving PW to local dev and complete the development
3. moving back to web server
no problem to login anymore
it seems, the key is the initial installation