Original message: By: Synametrics support engineer
You are correct - authentication is not being sent. I am glad you posted the wireshark screenshots. It appears you are using a firewall (probably Cisco PIX/ASA) that is performing SMTP Fixup. Try Googling "smtp fixup" for details. Two things happen when fixup is enabled:
- You see bunch of asterisks in the SMTP banner
- It can disable certain SMTP features. In this case, it has disabled the SMTP AUTH. As a result, authentication is never sent.
See image below.

The result of the EHLO command should include at least two features: AUTH and STARTTLS. Both are missing on your end. Try using port 587 instead and do a similar wireshark trace. It is very likely MS does not allow AUTH without STARTTLS.
Another suggestion is to use Email Sender program from http://xeams.com/email-sender.htm . Download this program in the installation folder of SynaMan and try sending an email to your SMTP server. Send us the logs.