I was trying to sort a neighbour out on Monday who couldn't get their email, ok in the morning but in the afternoon kept complaining about username/password. Sounded to me like an authentication problem at Virgin's servers. They had urgent emails to deal with before they went away late Tuesday.
When I got there she was on the phone to 'tech' support who was clearly going through a script. The person kept saying that they didn't support Outlook, only OE and Windows Mail. I pointed out that it had worked on Outlook for ages since day 1, what had they changed? She clearly didn't have technical knowledge, so they changed the password, still no joy. They then suggested I ring another number.
Before doing this I tried getting to the neighbour's email via Virgin's webmail. Straight in, no problems.
I then rang the new number and got a very helpful person.
However when I described the problem, it turned out, these people were actually to help resolve general user problems with their PC software. They did comment though that they'd had a lot of calls that day with similar email issues and also mentioned that there had been major server updates over the weekend and the technical guys were still sorting things out.
So I recommended my neighbour used web mail for the time being and that their Virgin (ntlworld.com to be exact) email issue should get sorted in a day or three.
While this doesn't sound to be the same problem as you, it may well have a common cause.
Tony