I'm also very late on this thread, but I just upgraded to Lion 10.7.3 from Snow Leopard, so I didn't experience the problem before. I have Lion installed on a MacBook with two accounts (mine and my wife's). After the Lion upgrade, I reset both of our mail accounts to Yahoo IMAP. Initially, mail worked fine for both my account and my wife's. Then, last night, email couldn't be sent from my wife's account. My account, which is configured exactly the same, continued to work just fine. I've been trying to resolve this the entire day and came across the same finding as "bruceko". If I turned off SSL for my wife's account, email could be sent without a problem. However, it just didn't seem like that was the proper solution, since both on my MacBook and my iMac (still on Snow Leopard), SSL is on. So, I turned SSL back on, and started searching the internet for a solution, and found this forum. And guess what? While reading this forum, I heard the whooshing sound of mail being sent from the OutBox. So, for now, the problem has magically gone away.