Well, after all that, it looks like a few very strange SMTP settings managed to get it all working again. Here's the config for SMTP that worked for us. I've circled in red the two settings I found to be contradictory...
I would have considered port 25 a low security port but still using STARTTLS to be against each other. But the fact is that this works! I can't explain it but who cares?? I pounded away at this machine all night long trying different combinations of settings but I would have never even considered this a possibility.
Ok I'm gonna call this issue resolved for me.