Sorry I figured out what I did wrong, so I wil share it for any others who may encounter the same issue.

When I upgraded to 3.2 I forgot to change the MachineValidationKey and MachineDecryptionKey in the <appSettings> section of the web.config file. For authentication to work you need to set the values to whatever they were in the old web.config file.

In my case I copied the following 2 lines (from my 3.1.1 web.config) and replaced the ones in my 3.2.0 web.config file.

<add key="MachineValidationKey" value="...
<add key="MachineDecryptionKey" value="...