You are a legend, You should get a Job with Apple and teach them how to fix issues, I have been trying for weeks to get this issue fixed and when you call the support centre they tell me it's a Microsoft issue, and when I call Microsoft they tell me it's an ICloud issue which has to do with Apple. Mate If I could shout you a beer right now i would do it with all my heart. Thanks again champ, you put a big smile to my face.
Update - I now have it working.
am not really sure what exactly fixed it.
I changed a lot of things but my setup now has the following which I think fixed.
outgoing server - p06-smtp.mail.me.com
override default port checked - port now 587
on more options button changed it to "use incoming server info".