Have you checked these settings:
Edit | Mail & Newsgroups Settings | Outgoing Server (SMTP)
Enable: Use name and password
If already enabled, then DISable... see if that helps.
Edit | Mail & Newsgroups Settings
For each news server, go into "Server Settings" and ensure
"Always request authentication when connecting to this server"
Have any of you contacted your ISP? The only time I've received a password request is when my ISP was doing maintenance.
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