What exactly is the issue? Note that the password incorrect appears to appear whenever Thunderbird can not establish a connection to the server and does not know why. A common reason is an anti virus firewall bolocking a recently updated Thunderbird version number.

Other reason can be related to being offline. having incorrect server settings, sometime because the providers changes what is required and a host of other issues like the internet is down. Thunderbird is not very tolerant to the internet simply dropping out from under it and offers odd errors because it thinks it is still online. So in the case of hotspots, simply moving to far from the local wifi can result in password errors.