Had the same issue and this saved the day for me https://www.vannoortproductions.nl/woocommerce-e-mail-utf-8-encoding/
You probably fixed it by now but I’m leaving this here hoping it might help someone else.
Note: post is from 2013 so path and function have changed, it is now woocommerce/includes/emails/class-wc-email.php and when you edit it just search for “\r\n” and change the code accordingly.
This fixed it partially for me as the SMTP client still doesn’t recognize special characters but at least it now includes headers in the mail.
Good luck!
