By default, wordpress uses UTF-8 encoding. This is what I had originally set htmlentities to in the plug-in, but some people have experienced issues with the latest version, possibly due to a conflict in their own wordpress's settings under /wp-admin/options-reading.php or maybe even a versioning issue in parsing the PHP itself, depending on your version of PHP. I think its more a wordpress encoding issue, vs PHP itself.
However, I have changed the code in my plugin to use quotes around the "UTF-8" encodings, so hopefully this fixes the issue. My site worked both ways, with and without the quotes around it, so I was not able to reproduce the errors others were having.
If you run into this issue, and it prevents you from logging into your site, please delete the plugin folder. This will disable it and allow you to login. Then, reinstall the latest plug-in, log out, and then try logging in again. At that point you should be ok. If the problem persists, please let me know. I'm curious to know what your settings tell you under /wp-admin/options-reading.php as well, if its set to UTF-8, or some other encoding, and if it now works with the latest patch, or if it is still broken after the new version.
Thank you for your help and patience. I hope this no longer poses an issue for people with alternate encodings set for their WordPress based sites.