It’s Magic requesting a password when saving a post

What happened?
I can log on as admin as normal.
I can create a new post and save it just fine… one time.
The first time works okay, but if I edit it and try to save the second time I get a pop up requesting a password with this message:

The server http://www.kasdorf.name at Magic requires a username and password.

Warning: This server is requesting that your username and password be sent in an insecure manner (basic authentication without a secure connection).

If I click cancel or X the window it dumps me out of WordPress. I can go back in, log on, and open the post again, edit it, but cannot save it…. have I been hijacked, or did I do something stupid?

Any ideas greatly apprecicate.