Mac Mail: smpt password not being recognized

Short version: I had to update my ATT modem and this prompted me to re-establish a connection with ATT.net. Given that I never use my ATT browser mail, I called tech support for the password. Once set, I was up and running on the internet. Even received emails via MacMail, but no outbound. ATT said I needed to match the "browser-based" password with the smpt in the account settings within Mac Mail.
Did it. —>quit—>restarted—>checked for password case sensitivity and even blind spaces. I got nothin'. I gotta say ATT tech's were consistently nice over the 4 hours I dealt with four people and in the end could offer no high level tech support as they are not familiar yet with Lion. I'm pretty techie, but the simple things here are mind melting me.

Thanks for all of your responses.
I redid everything you guys mentioned and at one point I got a message that it wasn't reaching the server. The option to "resolve to server" came up (which wasn't the default option) and I clicked it for the heck of it. Sure enough, it fixed the connection. Again, what was odd was that the deault was "try again".
It's working fine now, but since I don't know what caused the disconnect in the first place, I'm hoping the connection doesn't break again, I accept a meeting, and it doesn't get added to iCal. You'd think there'd be a redundancy for .ics files where it would say:
You have responded to an invite. Would you like to add to iCal?
[Yes] [No]
[ ] Never ask me again
Or it would there would be an option in Mail that says "Display Calendar invites as [] Attachment [] Email."
I know the preferences should take care of this, but meetings and appointments are important enough for this type of anal retentiveness.
Thanks again fo rall your help.

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