I don't have any experience with Net::Telnet, but from browsing through the manual I saw a few things that could be of some help. You might want to use the Prompt value of the login() method to specify which prompts to reply to as opposed to using a waitfor, and possibly, when this fails, instead of doing input_log(), you might try dump_log(). The full syntax of login() is:

$ok = $obj->login(Name => $username,
                  Password => $password,
                 [Prompt  => $match,]
                 [Timeout => $secs,]);
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so you also could try setting the timeout longer. It seems to me that this probably doesn't have to do with how you are inputting the password, but rather where the password is being inputted.