Earlier quoted context omitted.
You've forgotten to include the plug for FastMail. And maybe you should include the fact that you work for FastMail (it's not that you're hiding it, it's in your profile, but it's nice to mention in the text if you're working for the competitor). Personally, I stay clear from any hosted e-mail services. I don't care if their backend is open source or not. RMS explains all problems with SaaS in his essay "Who does tha…
I figured the "we" after FastMail said that I work here. Quite a lot of our backend source is open too (particularly the Cyrus IMAP server, which makes up the bulk of my work now that I have people with a more dedicated ops role for day-to-day tasks). We encrypt everything to disk, and everything on the wire that is practical (connecting to other providers still falls back to plaintext if they don't support STARTTLS,…
This is what I do. At home I have a Chromebox with FreeBSD and a fully encrypted disk. I have a VPS with an OpenVPN server and the required ports are forwarded to my own box. IMAP and SMTP submission require TLS so those are fully covered. Like you said though, the only thing you can't reasonably forcibly encrypt is SMTP itself. Most of the mail I receive comes with STARTTLS but not all.
With this setup the VPS provider can't see anything when SMTP happens with STARTTLS. Obviously if they really want to read my mail they can start MITM'ing the STARTTLS away because it isn't forced but this is the best setup that's reasonable.
My ISP for my home can only see encrypted OpenVPN traffic too. In fact the VPS is in another country but that's only a consequence of the silly VPS prices in my country.
Obviously with this setup I don't have to surrender my private key to anyone either, it sits on my own box (and I use a legitimate CA-issued certificate).