Email is like regular mail. Anyone can send an email as anybody - they don't need access to your email account. Just like anyone can drop a letter in a mailbox saying it came from a particular person.

If someone is breaking into your email, they probably want your contacts list. They'll spam those people with mail coming from yourself, though it probably isn't going through your own email server.

The funniest one I got was from a co-worker claiming he was stranded in England and to wire him a bunch of money for a plane ticket. So I walked 40 feet over to his desk to make sure he was OK.