I am having the exact same issue, except it's with my ATT Yahoo! account, which basically acts as a Yahoo! Plus email account. At first my email worked perfectly: email was being pushed to my iPhone and I had no trouble sending. But starting around August 1, I have noticed that none of my email is being sent. I get the little progress bar at the bottom of the screen that says "sending" (I turned the airplane sound off), but the "sent" email does not appear in my Sent folder and the recipient never receives it.
Because it has worked before, I'm inclined to believe that whoever is running that IMAP server (imap.apple.mail.yahoo.com) is at fault. After talking to Apple tech support, I was told that it was most likely a problem with Yahoo!'s servers. So then I called Yahoo! tech support only to be told that all their mail servers were working fine (the lady actually pinged all of them) and that it is most likely a problem with the iPhone.
It would be great if someone or Apple found a solution for this, but for now I just have it set up using POP, which works fine.