Talked to a third level tech at Sprint. They say it is is an issue with gingerbread and yahoo servers. She said they have recieved a statement saying both parties (Google and Yahoo) are fully aware and are working to resolve it. It is a major issue and should have a resolution soon.
This seems to be backed up by this statement from a Sprint tech over on their forum:
I'm sorry you're having issues with your Yahoo! email account, unfortunately there is a known issue where Android customers may experience intermittent blocking when accessing their Yahoo! mail via integrated email clients. These intermittent issues appear due to a configuration on the Yahoo! servers. We are aware of the issue and have made engineering resources available to Yahoo! to assist. At this time there is a few work around's you can try...
Try alternate email application for all of your email accounts such as K-9.
Try Using the dedicated Yahoo! email application.
Hope this helps!
Edit: Removed suggestion for Yahoo! plus mail service, several customers have stated this does not always resolve the issue.
Message was edited by: Shane_M