If it says, "bad RCON password," you have probably typed in the wrong password. Try typing it without quotes, although I don't expect that should make a difference. It should go without saying that if you want to use RCON from your client console, you need to be connected to the server you want to run commands on. If you're still having trouble, try using HLSW and see if that works.
The file cfg/valve.rc will be executed when the server starts; cfg/server.cfg will be executed every time a new map is loaded (including the first time). To make your server cstrike-normal, you may want to add "exec autoexec.cfg" to cfg/valve.rc and place your startup commands in cfg/autoexec.cfg. Below are the configs that I use to start a server up on DM. In this case, I will not be setting ge_gameplay in cfg/server.cfg; because cfg/server.cfg will be executed every time a map loads, its commands are invariable, and I would prefer to be able to set the gameplay (by admin action or SM) and have it remain.
Certainly there is no reason you can't place all the commands from cfg/autoexec.cfg in cfg/valve.rc, but doing so may create confusion when referring to documentation written for cstrike.
cfg/valve.rc
stuffcmds
exec autoexec.cfg
cfg/autoexec.cfg
map ge_bunker_classic
sv_allow_wait_command 0
sv_pausable 0
ge_gameplay deathmatch
ge_teamplay 0
tv_enable 0
tv_maxclients 25
tv_name "GE:S 4.1 SourceTV"