I've been having exactly the same problem for the last few days. I can't send or receive email with Live Mail from my Hotmail account. Other pop3 accounts work fine and I can log directly into my Hotmail account and send and receive email, but when I use Live Mail I get the following error:
Unable to send or receive messages for the Hotmail account.
Server Error: 3204
Server: 'https://mail.services.live.com/DeltaSync_v2.0.0/Sync.aspx'
Windows Live Mail Error ID: 0x8DE20003
I tried dropping and re-adding the account in Live Mail, but it didn't make any difference. When I check my online activity report in Hotmail it shows that I'm connecting successfully from Internet Explorer, but clearly, I'm not. All of these attempts resulted in the error above:
Successful sign-in (14 events)Today 8:52 PM - 9:23 PMUnited States