Just enabled 2-step verification and am now cannot sign into the Youtube app on my Android phone (HTC Sensation 4G).  The app thinks my password is incorrect and gives me a CAPTCHA ("please type the characters you see below") challenge/response test.  I know the password is correct because it works on my computer's browser at youtube.com.

I assumed that the app may require an application-specific password (like the Gmail app) and tried to create one in my Google account.  However, the generated password does not solve the problem when entering it at the youtube app login.  The app still says I've entered an incorrect password.

I feel like the 2-step verification is the problem.  I could disable it but really want the added security.  Anyone have an idea?  Thanks!