Yes, removing the @me.com resolved the 402 error. Thanks again for the upgrade. Keep the features coming. 

I was entering my @me.com at the end of my username. Just typing in the username (without the @me.com) works fine. Also logging in via WebDAV at iDisk.me.com works the same.

I too get this, and my account is still functional. I will try just WebDAV'ing in and see if that works...