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Do you have any other apps using the API running on your IP address (maybe on another machine on your network)? Try generating an access token for you on your app and putting that in the query, if the request returns normally, then the problem is not your app or the API, but another program using API.
Also you are including your application key in the request right? If you don't the request quota is only 300, compared to the 10,000 you get with a key.
On the homepage of Stackapps, on the left click Manage Applications, choose your app, then on the left click Query Statistics, this will provide you with a graph to show how many times the method has been requested and when. If the graph doesn't explain the problem take a screenshot and post it in your question.
You shouldn't be getting the users user name and password yourself. Not all users are registered with StackExchange, some use Google, Facebook etc (I dont know python so I'm not 100% sure exactly what your doing). just show the dialog to the user and they will log themselves. It's also a security issue as the user doesn't know that you're not keeping the password and doing bad stuff with it. Oauth means you never have to store the username and password, and you don't even need to store the access token persistently.
+1 for the anti popular/activity, they are too ambiguous. Although award_count should be on all badges, as when not associated with a user it means the number of times the badge has been awarded site-wide. (separate fields, e.g. total_award_count and user_award_count, might be better)