Hello.
I'm having this exact same problem with the exact same machine model (and for what it's worth, I had it with the M20 / M20i as well.)
After doing a network trace, I found that the WC asks the SMTP server if it supports GSSAPI (Kerberos) authentication (used with Active Directory among other things.) If the server replies that it does, the WC quits the connection!
WC: AUTH GSSAPI Server: 334 GSSAPI Supported WC: QUIT Server: 535 5.7.3 Authentication unsuccessful
So what's up with that?!
I have submitted this information to a Xerox level 2 technician and hopefully they'll reply here as well.