Well that was a good try. It took a long time to copy the contents of the CD to the HD. I assigned AmigaOS3.9 to the directory that copied the contents to. I ran the boingbag1 installation script, it had no apparent problem with my assign, but alas it came up with the same xad password error.
So about that other idea where I unpack and repack without the password... I already have the AmigaOS update file unpacked. How would I repack it?
Another thought is to manually install the unpacked components if there is a list somewhere of what is supposed to be done. Is this a feasible idea?