It is often the case where you may receive such an error message while trying to log in to an imap/pop3 account:
imap-login: Disconnected (auth failed, 1 attempts in 2 secs): user=<email@domain.com>, method=DIGEST-MD5
Although you are using the correct configured password you are still unable to authenticate.
The reason in this case is with the authentication method that is being used: digest-md5
You need to remove this from the dovecot config : /etc/dovecot/conf.d/10-auth.conf - remove digest-md5 and cram-md5
auth_mechanisms = plain login
restart dovecot afterwards.
