No, not stupid, I was just going way too fast. If one does not understand an explanation this is usually due to the explanation not being accurate, in short: my mistake
It took me some time but I think I found a better way to examine your problem.
First we need an alternative possibility to enter the password of the key file when starting OpenVPN manually from the adb console. OpenVPN is supposed to ask for the password on stdin if started with option '--askpass' without any file to lookup passwords. Though this dos not work on my phone, hence I have created a file name 'test.passwd' containing only one line with my OpenVPN key password. This file must be located in the same directory as the 'ovpn' file.
When your done with this you are ready to start OpenVPN 'manually' by doing this:
1) run 'adb shell'
2) type 'su'
3) type 'whoami' and make sure you are root (userid 0)
/system/xbin/openvpn --cd '/sdcard/openvpn' --config VPN-Server.ovpn --askpass test.passwd
Assuming you named the file holding your password 'test.passwd'
OpenVPN should now connect to your server and you should see something similar to this:
Tue May 1 10:55:03 2012 OpenVPN 2.1.1 i686-pc-linux-gnu [SSL] [LZO2] [EPOLL] built on Jan 6 2012
Tue May 1 10:55:03 2012 WARNING: file 'test.passwd' is group or others accessible
Tue May 1 10:55:03 2012 WARNING: No server certificate verification method has been enabled. See http://openvpn.net/howto.html#mitm for more info.
Tue May 1 10:55:03 2012 NOTE: OpenVPN 2.1 requires '--script-security 2' or higher to call user-defined scripts or executables
Tue May 1 10:55:03 2012 WARNING: this configuration may cache passwords in memory -- use the auth-nocache option to prevent this
Tue May 1 10:55:03 2012 WARNING: file './xy@no_one_cares.p12' is group or others accessible
Tue May 1 10:55:03 2012 LZO compression initialized
Tue May 1 10:55:03 2012 UDPv4 link local: [undef]
Tue May 1 10:55:03 2012 UDPv4 link remote: xxx.yyy.zzzz.wwww:1194
Tue May 1 10:55:04 2012 [openvpn.myvpn.server] Peer Connection Initiated with xxx.yyy.zzzz.wwww:1194
Tue May 1 10:55:06 2012 TUN/TAP device tun0 opened
Tue May 1 10:55:06 2012 /system/bin/ifconfig tun0 192.168.101.6 pointopoint 192.168.101.5 mtu 1500
Tue May 1 10:55:06 2012 Initialization Sequence Completed
At this point you should invoke another 'adb shell' and type 'busybox ifconfig'. If you see a tun0 device then the OpenVPN connection is established.
On my system this looks like this:
lo Link encap:Local Loopback
inet addr:127.0.0.1 Mask:255.0.0.0
inet6 addr: ::1/128 Scope:Host
UP LOOPBACK RUNNING MTU:16436 Metric:1
RX packets:171 errors:0 dropped:0 overruns:0 frame:0
TX packets:171 errors:0 dropped:0 overruns:0 carrier:0
RX bytes:11713 (11.4 KiB) TX bytes:11713 (11.4 KiB)
tun0 Link encap:UNSPEC HWaddr 00-00-00-00-00-00-00-00-00-00-00-00-00-00-00-00
inet addr:192.168.101.6 P-t-P:192.168.101.5 Mask:255.255.255.255
UP POINTOPOINT RUNNING NOARP MULTICAST MTU:1500 Metric:1
RX packets:0 errors:0 dropped:0 overruns:0 frame:0
TX packets:0 errors:0 dropped:0 overruns:0 carrier:0
RX bytes:0 (0.0 B) TX bytes:0 (0.0 B)
wlan0 Link encap:Ethernet HWaddr 12:34:56:78:9A:BC
inet addr:xyz.vw.11.32 Bcast:xyz.vw.11.255 Mask:255.255.255.0
inet6 addr: f370::6sd6:f891:fz8e:9qqb/64 Scope:Link
UP BROADCAST RUNNING MULTICAST MTU:1500 Metric:1
RX packets:8185 errors:0 dropped:271 overruns:0 frame:0
TX packets:9578 errors:0 dropped:0 overruns:0 carrier:0
RX bytes:2058632 (1.9 MiB) TX bytes:1000224 (976.7 KiB)
If not check the output of the other shell, it will tell you about where to search for the problem (hopefully