New Account failure with Embarq POP/SMTP

[dougwoods@embarqmail.com]

I cannot create a new account for Embarq email. I receive the following message dialog:
"An encrypted email connection has been detected".

I am not using SSL for either POP or SMTP servers.
Outlook works fine in this environment with no SSL configured.

Environment:
Windows XP SP2
Firewall turned off
Anti-Virus disabled

Attached zdesktop.log and zdesktop.out