I'm having the same problem but with some twists. I have photos in Picasa that up to about a week ago I could send anywhere by WLM but that has now stopped.  I select the photo....click "e-mail" and they go into an e-mail just like always but will not send. 

This is what I get from WLM:

0 Delete the photo email, create a new one and try to send again.

Sever 'mail.intelos.net'

Windows Live Mail error ID 0x8CCC0002

Protocol SMTP

Port 25

Secure (SSL) no

0 The message could not be sent because it could not be split into smaller parts.

Now, The same message but with the WLM error ID 080042OCA  was repeated 66 times in it.  SIXTY SIX TIMES!  And there are only 36 pictures in the group.

Thanks for any help you can give me.

Maynard