Inbox empty using OS X Mail with outlook.com account (IMAP)
I've faced the same problem trying to set up my wife's Hotmail account in Mail.app. After much fiddling I eventually gave up and used POP3 instead.

About the only suggestion out there that I didn't try was trimming down the inbox (she had, I believe, 3k+ emails in her inbox), since some people reported solving the problem by getting their inboxes down to, say, 100 emails or so. I didn't even bother trying that solution since it seems so fragile -- what happens when she receives new email above the magic threshold that breaks IMAP? Is it just going to break again?

Much as it pains me to say this, it appears POP3 is the way to go for Hotmail/outlook.com/etc. accounts. IMAP appears to be simply broken.