As of March 14, 2012, Yahoo! Small Business will no longer allow users to send email using SMTP from an unverified email address. To resolve this error, use one of the following resolutions:
Add the "From" address as an alias.
NOTE: If you are not set up as an administrator or an owner you will not have access to this area, you will need to contact an account administrator or the owner to add the alias.
After using one of the above resolutions, if you are still unable to send email we suggest that you follow the help article, Errors Sending Mail (SMTP).