Finally, got a solution to this problem and wanna share incase anybody goes through frustrating this problem in the future and also incase non of the solutions on the web were of help.
The trick is just go to your outlook.com on a PC, log in and go to edit profile. Click on manage accounts and remove all associated accounts (facebook, twitter, google, linkedin, socl, flikr, etc).
Reconnect all again and BAM!.....all works fine and perfect.
Hope this helps someone.