diff --git a/setup/bindir/cloud-set-guest-password.in b/setup/bindir/cloud-set-guest-password.in
index aedcf155e79..b61ba87ff47 100755
--- a/setup/bindir/cloud-set-guest-password.in
+++ b/setup/bindir/cloud-set-guest-password.in
@@ -11,69 +11,89 @@ user=root
 # Add your DHCP lease folders here
 DHCP_FOLDERS="/var/lib/dhclient/* /var/lib/dhcp3/*"
 password_received=0
+file_count=0
+error_count=0
 
 for DHCP_FILE in $DHCP_FOLDERS
 do
 	if [ -f $DHCP_FILE ]
 	then
+		file_count=$((file_count+1))
 		PASSWORD_SERVER_IP=$(grep dhcp-server-identifier $DHCP_FILE | tail -1 | awk '{print $NF}' | tr -d '\;')
 
 		if [ -n $PASSWORD_SERVER_IP ]
 		then
+			logger -t "cloud" "Found password server IP $PASSWORD_SERVER_IP in $DHCP_FILE"
 			logger -t "cloud" "Sending request to password server at $PASSWORD_SERVER_IP"
 			password=$(wget -t 3 -T 20 -O - --header "DomU_Request: send_my_password" $PASSWORD_SERVER_IP:8080)
 
 			if [ $? -eq 0 ]
 			then
-				logger -t "cloud" "Got a password from server at $PASSWORD_SERVER_IP"
-				password_received=1
-				break
+				logger -t "cloud" "Got response from server at $PASSWORD_SERVER_IP"
+				
+				case $password in
+				
+				"")					logger -t "cloud" "Password server at $PASSWORD_SERVER_IP did not have any password for the VM"
+									continue
+									;;
+				
+				"bad_request")		logger -t "cloud" "VM sent an invalid request to password server at $PASSWORD_SERVER_IP"
+									error_count=$((error_count+1))
+									continue
+									;;
+									
+				"saved_password") 	logger -t "cloud" "VM has already saved a password from the password server at $PASSWORD_SERVER_IP"
+									continue
+									;;
+									
+				*)					logger -t "cloud" "VM got a valid password from server at $PASSWORD_SERVER_IP"
+									password_received=1
+									break
+									;;
+									
+				esac
+			else
+				logger -t "cloud" "Failed to send request to password server at $PASSWORD_SERVER_IP"
+				error_count=$((error_count+1))
 			fi
+		else
+			logger -t "cloud" "Could not find password server IP in $DHCP_FILE"
+			error_count=$((error_count+1))
 		fi
 	fi
 done
 
 if [ "$password_received" == "0" ]
 then
-	logger -t "cloud" "Failed to get password from server"
-	exit 1
+	if [ "$error_count" == "$file_count" ]
+	then
+		logger -t "cloud" "Failed to get password from any server"
+		exit 1
+	else
+		logger -t "cloud" "Did not need to change password."
+		exit 0
+	fi
 fi
 
 password=$(echo $password | tr -d '\r')
 
-case $password in
-
-	"")					logger -t "cloud" "Password server did not have any password for the VM."
-  						exit 0
-						;;
+logger -t "cloud" "Changing password ..."
+echo $password | passwd --stdin $user
 						
-	"bad_request")		logger -t "cloud" "VM sent an invalid request to password server."
-						exit 1
-						;;
-						
-	"saved_password") 	logger -t "cloud" "VM has already saved a password from the password server."
-						exit 0
-						;;
-
-	*)					logger -t "cloud" "Changing password for the VM..."
-						echo $password | passwd --stdin $user
-						
-						if [ $? -gt 0 ]
-						then
-							usermod -p `mkpasswd $password 42` $user
+if [ $? -gt 0 ]
+then
+	usermod -p `mkpasswd $password 42` $user
 		
-							if [ $? -gt 0 ]
-							then
-								logger -t "cloud" "Failed to change password for user $user"
-								exit 1
-							else
-								logger -t "cloud" "Successfully changed password for user $user"
-							fi
-						fi
+	if [ $? -gt 0 ]
+	then
+		logger -t "cloud" "Failed to change password for user $user"
+		exit 1
+	else
+		logger -t "cloud" "Successfully changed password for user $user"
+	fi
+fi
 						
-						logger -t "cloud" "Sending acknowledgment to password server at $PASSWORD_SERVER_IP"
-						wget -t 3 -T 20 -O - --header "DomU_Request: saved_password" $PASSWORD_SERVER_IP:8080
-						exit 0
-						;;
-	
-esac
+logger -t "cloud" "Sending acknowledgment to password server at $PASSWORD_SERVER_IP"
+wget -t 3 -T 20 -O - --header "DomU_Request: saved_password" $PASSWORD_SERVER_IP:8080
+exit 0
+