I've come to the conclusion my problems lie with this part of the dovecot imap configuration file.
I've tried differnt things and I can't seem to make the problem better. I can definatly make it worse on this where I can't send any email.
If it helps, my location for mail users are /var/mail/<username>
Hope this helps.
##
## Mailbox locations and namespaces
##
# Location for users' mailboxes. This is the same as the old default_mail_env
# setting. The default is empty, which means that Dovecot tries to find the
# mailboxes automatically. This won't work if the user doesn't have any mail
# yet, so you should explicitly tell Dovecot the full location.
#
# If you're using mbox, giving a path to the INBOX file (eg. /var/mail/%u)
# isn't enough. You'll also need to tell Dovecot where the other mailboxes are
# and where Dovecot can place its index files. This is called the "root mail
# directory", and it must be the first path given in the mail_location setting.
#
# There are a few special variables you can use, eg.:
#
# %u - username
# %n - user part in user@domain, same as %u if there's no domain
# %d - domain part in user@domain, empty if there's no domain
# %h - home directory
#
# See doc/variables.txt for full list. Some examples:
#
# mail_location = maildir:~/Maildir
# mail_location = mbox:~/mail:INBOX=/var/mail/%u
# mail_location = mbox:/var/mail/%1n/%n:INDEX=/var/indexes/%1n/%n
#
#
http://wiki.dovecot.org/MailLocation
#
mail_location =
