Server Error: 3204
Server: 'https://mail.services.live.com/DeltaSync_v2.0.0/Sync.aspx'
Windows Live Mail Error ID: 0x8DE20003

I tried the suggested solution via the below link several times and it did not work.

i.e.  https://support.microsoft.com/en-au/kb/2842520

What I did find to work was to;

MY APPARENT SOLUTION - STEPS

1. log into the account via the web browser ( via outlook.com )

2. Setup the phone security option for the account

3. Wait for the security SMS code

4. Enter the security SMS code

5. Delete the Windows Live Mail 2012 account in the Live Mail application

6. Add the account back in the Windows Live Mail 2012 application

7. Click Send / Receive and wait patiently a few minutes.

8. SUCCESS ! Now it worked and synced properly.

Thus I'm wondering of it's some security blocking system that stops people adding the account, until its security is set up via the phone or perhaps via another email account?

NOTE: Several other accounts I use that I set up in Windows Live Mail 2012 were working OK. It was just one account that was not working. I'm pretty sure the other accounts do have the security phone number or email set up.

Anyway perhaps worth a try if you have no luck with the suggested Microsoft solution.