Well, I got it working by simply turning off my ZoneAlarm while installing. But now when I use OAuth2 with hotmail I get a failure to connect error message.

Turn off zonealarm again is my guess.

Yeah, tried that. When I ask to check mail, it goes to "Host contacted, sending login information" and Thunderbird freezes right there for a couple of minutes. Will not check any other accounts until it unfreezes. I am thinking of deleting and reinstalling the problematic account but I am afraid of losing all of my current emails and history. Does anyone know if deleting and reinstalling starts everything fresh or can I access my history?

So, yes, you do lose everything with a new account although if you simply change the account name before you create a new account, you keep everything, you just can not access emails with the old account. I tried to create a new account with my hotmail address but everything hung up at the automatic setting search. When I cancelled and tried to do it manually, there is no oAuth2 choice. This is frustrating because I now have notices that as of Spetember 16, I will not be able to access my hotmail accounts unless I use the oAuth2 setting.

The latest is that I created a new user on my computer and initiated Thunderbird on the new user. It was a clean install so there were no accounts and I created the account in question. Thunderbird automatically got all the parameters and created the account immediately. I checked the settings and oAuth2 was working. Everything worked fine so the problem in my regular profile has to be some setting in Thunderbird that I am missing I think. I tried to import my Thunderbird profile to the set up in the new profile and some came over but not all and no calendar. If there any suggestions as to what I am missing here I would like to hear them.

When you were changing to OAuth2 did you update the Server Name to outlook.office365.com?

Yes, I have tried all server and port combinations. I have been trying to figure this out since January when one of my three hotmail accounts started giving intermittent bad user name or password errors. Just one of the three, the other two work just fine. It was suggested then that I change to the oAuth2 protocol and I have had no luck changing any of my accounts to the oAuth2 protocol and I have just received warnings on all three accounts that I have until September 16 to convert or I will not be able to access my email accounts using Thunderbird. Of course I can delete Thunderbird and start over (see above) or simply just use Outlook but doing either, I lose almost 20 years of history that I want to keep. I am trying to see if there is a way to import the history but the imports are sporadic and I lose most of the archives and all of the current emails. Also, I have upgraded to Version 128.0.1 and the issue persists.

I'm at a loss as to what history you might be referring to, I don't see any history for Thunderbird? Are you using POP to save the emails locally while deleting them from the hotmail account? Typically people would use the default option of IMAP which syncs to hotmail leaving all email on hotmail so deleting an account from Thunderbird would not affect your messages sitting on Microsofts server.

Yes, I have been using POP since I started using emails. I prefer to administrate my own emails and Thunderbird has traditionally been far more reliable than Hotmail. In any case, I have tried setting the oAuth2 protocol in both IMAP and POP with the same results as above so, POP or IMAP does not seem to be the issue. I have discovered that I can install Thunderbird from scratch and point the Local Directory to the old directory (the one that I blow away) which brings everything back except the Calendar which is ok, as the Calendar history is just a convenience. Since a fresh install solves the problem, I guess over the years I must have ticked or tweaked something that prevents oAuth2 protocol from working even though it shows as available..

Progress of a sort. I ran Thunderbird in Trouble shoot mode and OAuth2 protocol works just fine. So I removed all add-ons and checked the disable all add-ons and reset preferences then restarted in regular mode and... OAuth2 mode does not work. Just hangs up for couple of minutes the the old Authorization failed error message from Windows. Any idea what to do now?

There is a good chance that something got buggered up installing the new version over top of the old as the release notes state "Thunderbird version 128.0 is only offered as direct download from thunderbird.net and not as an upgrade from Thunderbird version 115 or earlier. A future release will provide updates from earlier versions."

My only suggestion I can think of at this point is to backup your profile folder, do a fresh install get it all setup and running, close Thunderbird then just copy the mail/calendar files from the old profile into the new one, there will be 2 files for each mail folder (e.g. Inbox,Inbox.msf), you can put them either in Local Files or the new pop folder location (tho maybe rename so as not to overwrite any newly downloaded emails?).

That sounds logical since when I created a new user on my computer and installed Version 128 and pointed to my original Profile folder, everything worked just fine. I will try a complete uninstall and reinstallation of Version 128 and replace the profile folder with my old profile folder on a different computer to make sure I get everything back and that the screw up is not in the profile folder itself although I doubt it is since everything worked when I did the trial in the new user.Success or failure, I will report back. Thanks for your help C45P3R.

Well, no matter what I do, the only way I can get OAuth2 protocol working in Thunderbird is to have a clean install and create the email accounts from scratch. No matter what I transfer over from the old installation, I still just get a hang up when I try to use OAuth2 protocol. It only works on a clean install. I tried just creating new email accounts and leaving the old ones closed so then at least I could have access to my historic emails but Thunderbird or Hotmail would not allow me to even create those new accounts in the old installation. It looks like the only way is a full uninstall and new installation which is too bad because as of September 16, according to the notifications I have received on all accounts now from Hotmail, I will have to abandon 20 plus years of history and start anew. I don't even know how to save the history so that I can visit it, so it looks now like on that day I will have to find a new way to do it (probably just leave the hotmail accounts open on my desktop I guess) and that will be the end of my 20 plus year of Thunderbird. Very Frustrating.

Ok, so, everything works fine using OAuth2 protocol in Troubleshooting mode (not at all in regular mode. I was able to compare about config file between Troubleshooting and regular modes and everything is exactly the same except for the Last Filter Time and Next Filter time for each account. Those figures change each time Thunderbird is opened or changer to Troubleshooting Mode. There are some significant differences between the Troubleshooting Information panels when in Regular mode and Troubleshooting mode. I wonder if it matters if I simply leave it in Troubleshooting mode all the time since OAuth2 protocol works there and not in Regular mode. It is a little slow and klunky in Troubleshooting mode but it works. Any ideas on that or how to determine which Troubleshooting Information items are critical to the higher security Hotmail requirements?

Victory - C45P3R - your solution worked. The trick was to back up the current profile then wipe all profiles out as well as the profile.ini file so that it became a fresh installation. Then I copied only the Mail folder over to the new profile , created "new user" the same name as the old user (Outlook did the rest) then, after the new user was established, pointed the Local Directory to the old user account in the Mail folder that I copied over. I did this for each address (Thunderbird had to be restarted after each process) and everything works as advertised. The easiest way to move the Calendar over to the new set up was to export it to a .ics file in the old set up then import it in the new set up. I have been using Thunderbird since about 2004/2005 so I guess somewhere along the line an update screwed around with the Outlook security protocols and manifested around January of this year when I started having authentication issues with one of my accounts. I am relieved that I was able to solve this without blowing away my 20 odd years of history. Thank you for your help and patience C45P3R.