OK WOW THANKS YOSEMITE. After a couple hours of adjusting this is what worked for me.
- Delete all accounts from mail
- Delete saved passwords in Applications> Utilities keychain>Keychain access
If your email (gmail) requires 'Application-specific Password'. You must access your account settings from your browser before adding into Mail.
Now follow these tips from the HelicopterJon
Open up Finder
In the Finder menu bar select Go > Go to folder
type in ~/Library and click Go (on my kb the "~" is next to the left shift key)
Open the folder Mail
Open the folder V2
Open the folder MailData
Double click to open Accounts.plist (should open in TextEdit)
Find the block of data that contains the offending mail account
Find the line within this block that says <key>UserAllowsInsecureAuthentication</key>
Change the line below this from <false/> to <true/>
Quit TextEdit
Restart mail
Now, open mail and add your accounts. Test by sending a new message, if you try a previous save draft, It will not work.