After being able to send/receive email from my iCloud and Mobile Me accounts without issues Outlook now reports the error:

5.7.8 Bad username or password (Authentication failed).

Error code: -17900

I searched the database and found a thread similar to mine:  http://answers.microsoft.com/en-us/mac/forum/macoffice2011-macoutlook/cant-send-from-icloud-account/3aa0c490-4aca-47a4-ad3d-a556cbc96d77.

The issue in the thread fixed itself after a month.  I tried the suggestions in the thread but without success. 

Any suggestions would be appreciated.