I think that is just the password error...isn't it? I can't remember the number for that though. Try going into Settings => Accounts and see if there is a flag in there marking your Yahoo account and re-enter your password.
Is it working on a PC?
[I am using Yahoo, everything is running fine for me]
It is not password issue. works fine on pc. deleted account and added the account. still not working. funny thing is that occasionally it automatically updates the messages.