I had to uninstall and reinstall Spotify. I think I had it set to offline mode and then was disconnected. With the clincher being that it was set as offline and therefore not permitted to log in. That's my guess.
Not thrilled with this app and since it wasn't developed by Spotify, they have no initiative to fix it. Microsoft isn't exactly quick with their updates for the Windows Phone, why would they be any different for the apps?
I don't use Zune because Spotify trumps Zune for availability and catalog size. It's not even a fair fight.