SimpleMail 0.35 does not exist for MorphOS. The latest one is 0.33 and that's the one I originally tried.

http://simplemail.sourceforge.net/index.php?body=downloads

I reinstalled 0.33 again and have the same problem (RCPT failed for several non .me domains). At this point I am really suspecting on some weird MobileMe issue since it seems that I am the only one experiencing this weirdness.

Thanks for everyone who tried to help with this one. I will try to experiment more by myself with this. I will also try to revisit YAM once again.