I had a similar problem for a while.
We can have 2 mailboxes – so to speak.
One in Outlook Express (or Microsoft Outlook)
The other with our service provider which in my case was Big Pond.
The server (Big Pond) was keeping copies of mail forwarded to Outlook and was full.
Emails from HC were consequently bouncing.
You just may need to go into your account, delete emails stored and then change the settings.
