I suggest deleting the passwords for account. that is at account settings>privacy&security. - click saved passwords and then show passwords - highlight the rows for that specific account and delete them. - try signing in again.

I deleted the passwords and now it just hangs. I still get the popup and clicking on Allow doesn't do anything. At no time does it ask me for a password

perhaps post a screen capture of this pop up.

My understanding of the google oauth flow is that there are a number of screens of information you need to complete one after the other. There is no single allow page.

Note that in account settings check that the authentication method is set to oauth before trying to fix anything related to google connections as that is googles preferred method of authentication.

here's a screen shot of the popup

That is the last page of the GMail oauth flow. you will have been asked for your username and pasword before you get to this point, unless Google are already satisfied your authentication is OK using the stored oAuth token

You said you deleted the passwords, I must assume you have not removed the oAuth tokens from the password manager, or this is not the start of the process you are simply reporting the end.

After you click allow, all that happens in a token is posted to the localhost for Thunderbird to use. Sometime these adapter is already in use from things like web servers, developer tools and antivirus products, then there are the other causes of failure as described here https://support.mozilla.org/en-US/kb/automatic-conversion-google-mail-accounts-oauth20.

All passwords in the password manager were deleted and this allow popup is the only thing that happens

Looking at the link you sent me my settings are Outgoing smtp.gmail.com port 587 SSL/TLS OAuth2

Incoming pop.gmail.com SSL/TLS OAuth2