I have seen almost the same situation, but with the Character Viewer instead of the Keyboard Viewer. Wherever it's happening, it doesn't seem to be in your user folder, because the Character Viewer would even pop up in the Login Window (summoned by Fast User Switching) which, considering that it's asking which user you want to be, shouldn't be consulting any of the current users preferences.
What finally worked for me was to repeatedly Show/Hide the Character Viewer. Apparently, it's confused about whether it's currently being shown, and the menu doesn't reflect reality until it's been toggled a few times.
Just a guess, something that occurred to me as I typed the above, but the window asking for your password must be being run by process running as root, and maybe it's saving its state in root's preferences folder (~root/Library/Preferences) instead of in yours (~/Library/Preferences). ~root is /var/root. I tried to test that, but (a) I couldn't get it to happen again (on 10.7.4), and (b) nothing in that folder changed while I was trying. I would call that inconclusive either way.
