Mail On Osx


I have a problem using mail on osx 10.3.9 (same on 10.3.7).

I am using the imap/smtp server on AOL.

I can read all mails ok.
If I send text or rtf message there is no problem.
If I try to send a mail with an attachment (of any size or type(ascii, tiff, jpeg....), even a 1 character ascii text file), mail says its sending it and gives "37% complete" (or similar), but never actualy sends it. The activity monitor continues spinning, and eventually times out with a message about needing to use port 587.
I have tried setting the port address at 587,25,147 as suggested at various times and various websites.
My firewall is configured to enable these ports (I can send messages I've typed in anyway.

Anything else I can try?

Can pictures be inserted in the body of the message?