Using conditional statements inside 'expect'

I need to automate logging into a TELNET session using expect, but I need to take care of multiple passwords for the same username.

Here's the flow I need to create:

1. Open TELNET session to an IP
2. Send user-name
3. Send password
4. Wrong password? Send the same user-name again, then a different password
5. Should have successfully logged-in at this point...

For what it's worth, here's what I've got so far:

#!/usr/bin/expect
spawn telnet 192.168.40.100
expect "login:"
send "spongebob\r"
expect "password:"
send "squarepants\r"
expect "login incorrect" {
  expect "login:"
  send "spongebob\r"
  expect "password:"
  send "rhombuspants\r"
}
expect "prompt\>" {
  send_user "success!\r"
}
send "blah...blah...blah\r"

Needless to say this doesn't work, and nor does it look very pretty. From my adventures with Google expect seems to be something of a dark-art. Thanks in advance to anyone for assistance in the matter!