if the timing is accurate, then the event that triggered both problems
is that yahoo implemented SASL.

the error message you're getting is just an elaborate way of saying
"login failed". judging by the mozilla bug, the problem might be that
you're using different capitalization of your login name.

alternatively, the login *is* wrong, because the password expired or
something like that.

if neither applies, try configuring "AuthMech LOGIN".

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