Version:            (using KDE KDE 3.5.1)
Installed from:    Compiled From Sources
Compiler:          gcc 3.4.1 
OS:                Linux

Trying to send out email I get:
Sending failed:
Authorization failed, An error occured during authentication: SASL(-4): no mechanism available: No worthy mechs found authentication not supported
The message will stay in the 'outbox' folder until you either fix the problem (e.g. a broken address) or remove the message from the 'outbox' folder.
The following transport protocol was used:
Telecom

I have been using same autentication with previous version KDE3.3.2 and other previous versions without any problem. cyrus-sasl library seems to be new library You are using with this version of KDE. Verification my provider require is simple login name: password:

I certainly don't know how to fix the problem. Currently I have installed version 3.5.1 and 3.3.2
And can switch by changing link to one I need and ldconfig correct libraries in. But even here there is problem that Kmail from version 3.3.2 tries to create Mail directory and fails, probably becouse one is allready in place.

I personally think that it should attempt to do so only after previously checking for nonexistence
instead of simply erasing previous one as was the case in past. You actually destroying someones email that way Don't You think? In all cases it should simply rename it if creation of NEW Mail direstory and its structure is required by program.

Michael