Ok, I resolved that issue partially. Re-reading the documentation I came across this again and something dawned on me.
POP3 Server: This is the mail server that the MC email account is stored on. The default port used to connect is 25 , however you can specify a port by appending it to the server domain with a colon. Example mail.domain.com:64, where 64 is the port number you wish to connect with.
I realized the default port for POP3 is 110 not 25. The port 25 is the default of SMTP. Adding :110 to the end of the POP3 address then instead of failing threw a permissions error because we run in medium and hitting 110 requires SocketPermission. I then added the following 2 items to our custom trust and now the connection shows as Successful. I can also see the communications now between the DNN & POP server in the POP server's logs.
<SecurityClass Name="SocketPermission" Description="System.Net.SocketPermission, System, Version=2.0.0.0, Culture=neutral, PublicKeyToken=b77a5c561934e089"/>
<IPermission class="SocketPermission" version="1" Unrestricted="true" />