Your error code translates to SMTP_RESPONSE_ERROR, which means that Windows Live Mail has received an invalid response from the SMTP server.
This might be due to a number of causes, the most likely one being that you have incorrect connection or authentication settings.
Firewalls could block access to your port. If you have a firewall performing Deep Packet Inspection it might block your traffic because you are sending SMTP packets on a port that is usually reserved for POP3. However, this seems unlikely because you said it works with Thunderbird.
Your Windows firewall might block your Windows Live Mail. Check that it is allowed to communicate with your SMTP server.
Some anti virus software's email scanning features seem to interfere with Microsoft Outlook and generate this error code. Maybe the same is true for Windows Live Mail. Try disabling or uninstalling your anti virus software and see whether the error persists.