Spoke to the advisor this morning, after exhaustive investigation, she verified that problem is not with my hardware, but a problem on Apple's end.
She also said that I'm not the only one experiencing this and they have gotten many recent complaints regarding the issue so I'm guessing they changed something on their back end that screwed up mail authentication for a number of iCloud users.
She told me that it's been escalated to engineering and I should hear get a call during the week. Luckily, this is my young son's account and he doesn't use the email much so it's not inconveniencing me - I would be a lot more put out if this was affecting my iCloud account.
But rest assured, it's not a problem with your equipment. This one's on Apple.