If Yahoo's servers are having authentication problems, you'll get that error whether your password is correct or not. I see this on all my accounts occasionally, Yahoo more than the rest. Usually it fixes itself if I just ignore it.
Of course, I can't get email from that account in the mean time, not through Mail anyway. That's why I keep a link the mobile site as a backup.
If it refuses to go away after a reasonable time (a day at most), you could try changing the password on Yahoo, then on the iPad and other computers/devices. Maybe forcing a change will do something to reset the server. It's a slim hope, but something to try anyway.
