I fixed this by adding an entry to my hosts file.
Outlook could not resolve the hostname it was using for the exchange
server.
If you ever notice, when setting up your Exchange profile, the server
IP address or hostname that YOU supply will automatically be replaced by
the hostname the exchange server communicates back.
If this hostname happens to be an internal hostname or otherwise
unresovable by Outlook when you thereafter open Outlook for the first
time, then you will receive this error.
In my case, the exchange server was communicating back an internal
non-public hostname and so I added an entry for it to the
windows\system32\drivers\etc\hosts file. Example:
192.168.11.14 exchange.intranet.mycompany.com
--
hrmilo
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