Does not work with Panels

Solution, move the code to hook_init.

I have looked through my projects but I can't find the one where I used this solution I'm afraid. I also had a look at the code but I think it has changed since last time. However, you could load the node based on values in arg(). Changes made to the node will not however persist when made through hook_init().

Have a look at what OG Panels module does:

function og_panels_init(){
  if(arg(0) == 'node' && arg(1) > 0){
      $group_node = node_load(arg(1));
      if (og_is_group_type($group_node->type)) {
        og_set_theme($group_node);
        og_set_group_context($group_node);
        og_set_language($group_node);
        if( (arg(2) == "" || arg(2) == 'view') && variable_get('page_manager_node_view_disabled',0) == 1){
          drupal_set_message(t("In order to view the homepage, you need to enable node_view template, click ").'<a href="'.url("admin/build/pages/nojs/enable/node_view", array("query"=>"destination=node/$group_node->nid")).'">'.t("here").'</a> '.t("to enable."),"error");
        }
      }
  }
}

Perhaps the following code will get you started:

function protected_node_init() {
global $user;
if (module_exists('panels') && arg(0) == 'node' && is_numeric(arg(1))) {
$node = node_load(arg(1));
$protected = protected_node_isset_protected($node->nid);
if ($protected && !user_access('bypass password protection')) {
drupal_goto( 'protected-node', 'node/' . $node->nid);
}
}
}