My problem was as follow:
Fill in ID and password and clik on 'sign in', MANY TIMES, AND NOTHING HAPPENED (about 10 cliks), after appears the RED MESSAGE (ID or pass is incorrect).
I have another yahoomail ID and works perfect. I have phone net-connection and it did not work on the first ID either.
By chance I HAVE PRESSED MANY TIMES ENTER, EVEN AFTER THE RED MESSAGE APPEARED. So don t clik on 'sign in', PRESS ENTER many times - this worked for me at least.
Good luck :)