I'm not sure I understand from your explanation what's happening
here. "Extend" is what you to do an existing SharePoint application to
create a new IIS website that serves up content from an already-existing
SharePoint site collection.
What kind of password prompt is this (popup window, or a login page with the
SharePoint theme)? Did you set up Forms-Based Authentication (FBA) on this
site?
If you go to Central Admin->Application Management->Site Collection
Administrators, you can pull down the little dropdown (near the upper right)
and choose the application that you created; then you can see who the Site
Collection Administrator is, and change it to your current account if
necessary.