Weighing in at 425 characters. This is my first ever attempt at Perl golf, so I'm not sure how good or bad it is. I won't tell you how long I spent on it. :-)

sub test_boggle_word {
($w,$n,@b)=@_;for(@b){push@{$h{$_}},$x++}@c=split'',$w;for(@c){return 
+0if!$h{$_}}@l=map{$h{$_}}@c;$c=-1;$i=-1;my@t;I:while(1){$j=$i+1;$t[$j
+]=@t>$j?$t[$j]+1:0;while($t[$j]<@{$l[$j]}){$t=$l[$j][$t[$j]];$a=$t;$b
+=$c;($a,$b)=($b,$a)if($a>$b);if($a==-1||($b-$a==1&&$b%$n>0)||($b-$a==
+$n-1&&$a%$n>0)||$b-$a==$n||($b-$a==$n+1&&$b%$n>0)){return 1if$i==@l-2
+;++$i;$c=$t;next I}++$t[$j]}--$i;pop@t;lastif$i<-1;$c=$i==-1?-1:$l[$i
+][$t[$i]]}
}
[download]

I didn't bother using the prepare_boggle_search() function. Also, I wasn't sure if creating extra functions was allowed, so I used iteration rather than recursion (which would have been more natural). This solution also is able to use the same letter more than once, but not consecutively (which was expressly forbidden). I hope that's okay. And for bonus points, it should work for any Boggle board of size NxN.

It's extremely hard to read all smushed up like that, so here's a little bit nicer version:

sub test_boggle_word {
  ($w,$n,@b)=@_;
  for(@b){push@{$h{$_}},$x++}
  @c=split'',$w;
  for(@c){return 0 if!$h{$_}}
  @l=map{$h{$_}}@c;
  $c=-1;
  $i=-1;
  my@t;
  I:while(1){
    $j=$i+1;
    $t[$j]=@t>$j?$t[$j]+1:0;
    while($t[$j]<@{$l[$j]}){
      $t=$l[$j][$t[$j]];
      $a=$t;
      $b=$c;
      ($a,$b)=($b,$a)if($a>$b);
      if($a==-1||($b-$a==1&&$b%$n>0)||($b-$a==$n-1&&$a%$n>0)||
         $b-$a==$n||($b-$a==$n+1&&$b%$n>0)){
         return 1 if$i==@l-2;
         ++$i;
         $c=$t;
         next I
      }
      ++$t[$j]
    }
    --$i;
    pop@t;
    last if$i<-1;
    $c=$i==-1?-1:$l[$i][$t[$i]]
  }
}
[download]

Any thoughts?