I've had the same problem and I definitely point it to Yahoo. One thing different with Yahoo is that you can't specify the root level of the site for the install.. I initial set up a test folder for the site (to keep the existing site live during the build) and everything worked fine in there.. When I moved the site to be live, contact form 7 & contact form 7 widget both stopped working. I tried using the SMTP plugin too but I can't get 'permission' from the server
The SMTP debugging output is shown below:
SMTP -> ERROR: Failed to connect to server: Permission denied (13)
Also tried all that was listed above, emails with the same url and different ones too..
any other thoughts? i'm about to move it and just put it on my server b/c I'm just running in circles with the troubleshooting, but hate to give up!