Microsoft reports that "customers running Windows 7 have reported issues of unable to resume from hibernation: "You've a computer running Win7 with power button configured to be used for hibernation. You change the setting of the Password protection on wake up setting to Require a password (recommended) option. The computer is put into hibernation. When you press power button to resume computer from hibernation. You're prompted to enter your user account credentials. The computer is put into hibernation again while you try to log on to computer. In this scenario, the computer screen dims after you log on to resume from hibernation," explains Microsoft in KB982635.
This issue occurs because two threads try to fade out the monitor at the same time. A hotfix is available to resolve this issue.