You say you cannot use it however have you actual tried using it? I tried it on my Mac OS X 10.6.8 Server Virtual Machine at the Login and it does toggle the state of the caps lock key. So I'm assuming if you are typing and it all come out in CAPS then if that will toggle on yours like it did on mine then one would think you could get logged in.
Otherwise I have nothing else to offer except to say build a new Virtual Machine and keep proper* backups of it in case this happens again. If you need to retrieve User Data you can temporarily add the old virtual hard disk to the new Virtual Machine and gather the User Data and then remove the old virtual hard disk.
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*It is a known fact that Time Machine is not 100% reliable backing up/restoring Virtual Machines under all circumstances/conditions. Also backing up Virtual Machines via Time Machine is disk/time intensive and wastes a tremendous amount of space for something that may be corrupt and worthless come time to restore it. At a minimum I would exclude Virtual Machines from Time Machine and with the Virtual Machines shutdown, not suspended, and VMware Fusion closed then manually copy the Virtual Machines Package(s) to an alternate location, preferably on to a different physical hard disk. Then keep the User Data that is stored within the Virtual Machine backed up off of the Virtual Machine on a regular basis so as to always have a current User Data Backup. If you have to restore a properly backed up Virtual Machine that is not as current at least you'll have a working Virtual Machine and current User Data to go forward with when you find out your Time Machine Backup of the Virtual Machine fails.
Also have a look at: Best Practices for virtual machine backup (programs and data) in VMware Fusion (1013628)