Hi James,
I'd like to confirm the following things:
1. What is the email address suffix you are using in your Office 365 account, @domain.onmicrosoft.com or @yourdomain.com?
2. If you are using the @yourdomain.com email address, have you added and verified your custom domain in Office 365?
3. Can you access the Outlook Web App (OWA) using your Office 365 account?
In this situation, I suggest you create a new user account in Office 365 and assign the corresponding license, check to see if you can set up the new Office 365 account in the Outlook for Mac 2011 successfully.
Thanks,
Bourne Zhang