You can go into the keychain access and delete the reference to the mail password and reenter it or go to System Preferences and change your password. There are actually myriad ways of doing this but this is the simplest. Hope this helps.
I am having the same problem - even deleted and recreated the email account. This ONLY happens on my AT&T/Yahoo accounts - the same with other posts I've read. My .mac account and an earthlink account are fine. Apple needs to work this out with ATT/Yahoo.