I suspect its a username issue. Servers will complain about an incorrect password if the username isn't correct.
Is your mail account your FTP account as well? I'm just trying to figure whether it's a mail-only account, which means that your username will be mXXXXXX. If so, you'll have to go to your Account settings in Mail.app and change your username in the Account Information pane.
Give your webmail account a try. Go to webmail.yourdomain.com and see if your regular username and password work there.