I am having the exact issue, I have created a new receive connector on port 587 to receive email from my manage engine service desk host, and when I change the settings in the outgoing smtp settings to this server and SMTP and port 587 and require authentication all sending fails.
But it works sending to my Exchange 2003 server just fine,
ALso I have another manage engine product (self service) using this same connector on port 587 to send external and internal emails using authentication from the same account I am trying with Service Desk.
Did you figure out the issue with this?
Kevin Hardy