I will refrain from discussing how crappy a MUA Eudora might be, I had similar Problems which went away after searching Qualcomms support area: Have a look here
http://www.eudora.com/techsupport/kb/2354hq.html download and install the fix: http://www.eudora.com/techsupport/mac/download/FixBustedSMTPAuth.hqx However, to avoid frustration, use a real mailclient to test your server or you'll never know what went wrong...
