First of all let me clear that it is not Microsoft Outlook Product Error, This error is about miss configurations of Microsoft Outlook POP3 and SMTP email Address. This error comes with Microsoft Office Outlook 2003, 2007 & 2010 as well and on all Microsoft Operating Systems. If you test your account while POP3 / SMTP email account settings in outlook, you may get this error stating “Send test e-mail message: An unknown error occurred, error code: 0x80040607”.“The following recipient(s) cannot be reached: 'email@example.com' on 12/14/2011 12:40 PM” In your e-mail body there may be something like this.
“Server error: '550 5.7.1 :127.0.0.10:Client host 188.8.131.52 blocked using 87.blocklist.zap; Mail from IP banned. To request removal from this list please visit http://www.spamhaus.org/query/bl?ip=$'”. I consider that both are the part of same miss-configuration. I always done below whenever I got this error, hopefully this will also work for you.
Office 2003 / 2007 / 2010, Navigate to your e-mail settings and Click on More Settings and While confirming your POP3 and SMTP ports , please click on “Outgoing Server” and then check following options on Outgoing Server Page “My Outgoing Server (SMTP) requires authentication” and under this verify that you have also check the option “Use same settings as my incoming mail server”.
My Exchange 2010’s SMTP settings don’t required Log on as authentication, so I am not providing any User Name or Password. If you think, you need to be logon as per your MS Exchange Server Administrator’s then fill these as well
Hope this will work lets come to discuss in comments box.