The login method in smtplib.py tries only one authentication mechanism.
There are legitimate situations where cram-md5 might fail, yet plain or
login would succeed.

RFC2554 states:
  If an AUTH command fails, the client may try another authentication
  mechanism by issuing another AUTH command.

The login method should attempt all mechanisms in preferred_auths before
returning a failure. This will make the code more robust, returning a
failure only when absolutely no authentication is possible.

Here is one work-around.  The default smtplib.SMTP.login() doesn't work
for StrongMail out of the box.

http://www.harelmalka.com/?p=94&cpage=1

This affects tophost.it too. Unable to login with CRAM-MD5 but plain login (as described in referenced workaround) work fine.

Fixed in r83742. I implemented this without a test case, because if we wait for a test case for this, we can wait forever (would need a SMTP server implementation in Python for the various auth methods).

A test suite is now available for both smtpd and smtplib modules.

Wow! That's great!

The attached patch against trunk (3.4) exercises the multiple-authentication functionality; the SMTP server advertises four different authentication methods,
and the code will try CRAM-MD5 first, which will fail, but LOGIN succeeds.

If this patch is OK, or if having a test isn't considered necessary, then this bug can be closed.

New changeset 19912ad231a3 by Andrew Kuchling in branch 'default':
Closes #6683: add a test that exercises multiple authentication.
http://hg.python.org/cpython/rev/19912ad231a3