What is the authenticity of the hadith which states that the lowest in rank among the people of Paradise will prepare to prostrate before one of his servants, thinking him to be an angel, and how does this reconcile with the prohibition of prostrating to other than Allah?

This lengthy hadith that describes the presentation (of deeds) and the reckoning, and mentions the lowest in rank among the people of Paradise, has variations in its wording (lafz) and chain of transmission (sanad), and in whether it is مرفوع (attributed to the Prophet) or موقوف (attributed to a Companion). As for the specific point of contention raised by the questioner, which is the mention of prostration to the king, this wording is "not preserved." The correct wording is that the prostration is to the Qahraman (steward or manager) whom he mistakes for his Lord, and it is not a prostration of worship or polytheism. Alternatively, it means he prepares himself for him and greets him. This latter wording is what other narrations affirm. The two Sheikhs (Bukhari and Muslim) agreed on narrating this hadith in an abridged form, while Muslim narrated it at length but did not include the problematic phrase. It should be noted that prostrating to other than Allah is not considered shirk in all cases, unless it is done as an act of worship.