Had this problem a few minutes ago on a 465 GB fully encrypted secondary drive. Obviously "formatting and starting over again" was not an acceptable solution. The following troubleshooting documentation describes this problem as relating to a corrupted volume header.
My guess as to why mine got corrupted is that I was doing some MBR work using Hiren's BootCD on a USB drive after removing a Ubuntu partition from my primary drive and may have somehow inadvertently touched the secondary drive's headers.
After restoring the volume header from the backup embedded in the volume, I've been able to mount and regain access to the volume. Steps are shown below taken from TrueCrypt's website.
TrueCrypt volume cannot be mounted; TrueCrypt reports "Incorrect
password or not a TrueCrypt volume".
The volume header may have been damaged by a third-party application
or malfunctioning hardware component.
If you created your volume using TrueCrypt 6.0 or later, you can try
to restore the volume header from the backup embedded in the volume by
following these steps: Run TrueCrypt 6.0 or later.
Click Select Device or Select File to select your volume.
Select Tools > Restore Volume Header.
If you created your volume using TrueCrypt 5.1a or earlier, you can try to mount your volume with
the command line option /m recovery as follows: Install TrueCrypt 6.1
On your keyboard, press and hold the Windows key and then press R. The
Windows Run dialog should appear.
Type in the following command (replace the last argument,
\Device\Harddisk1\Partition0, with the path to your volume and if
TrueCrypt is not installed in %ProgramFiles%, replace %ProgramFiles%
with the path to TrueCrypt):
"%ProgramFiles%\TrueCrypt\TrueCrypt.exe" /q /m recovery /v
Press Enter to try to mount your volume.