Microsoft account Login Issues

I'm have been having this issue with my Microsoft account for several weeks now.

It appears that the system thinks I have tried to log in too many times with an incorrect password.

What this means is:

Every time I log into Skype Desktop, I have to re-enter my password with a CAPTCHA

Every time I log into Skydrive via any Office app I have to re-enter my password with a CAPTCHA

The system will not allow me to change my password.

The only way I can change my password is to Reset it (https://account.live.com/ResetPassword.aspx).

I CAN NOT LOG INTO MY ACCOUNT ON MY XBOX AT ALL.

I have searched high and low for resolution to this issue to no avail.

In attempt to resolve this(some of this at the advisement of Xbox support), I have :

Reset my password

Reset or changed all my security proofs (https://account.live.com/proofs/Manage)

I have gone to every device I own that logs in with my Microsoft account including:

• My main machine at home
• Our kitchen/kids homework computer
• My Surface
• My WP8 phone

and made sure I can log in with my new password.

Every device will let me log in except my Xbox 360.

Some services require the CAPTCHA

I am software engineer and yet completely lost on this issue.

The issues I'm having are related to my Microsoft account and not any 1 device, yet there seems to be no support for it.

Any help is much appreciated. Gabe (the support guy at Xbox) has been very patient and helpful. He has even called me back to try to get this issue resolved and he is also baffled.

P.S.

I wonder, if you knew someone's email, could you just attempt to log in with their email a whole bunch of times intentionally with the wrong password, could you effectively block them from using their Xbox console?