Trend Micro IMSS v7.0 - Cannot relay 8 bit MIME to downstream mail server

We have upgraded Trend Micro Interscan Messaging Security Suite - IMSS to version 7.0.

Now we have numerous, non-spam, inbound emails that are not being delivered. These messages all show in the MTA Events as "Message... not relayed yet".

The tsmtpd.log for the period shows the following error for these emails:
    "CSmtpClientChanel::_ConnectSvr: Need 8BITMIME to send the message, but downstream MTA doesn't support it.      [smtpclientchanel.cpp(450)"

I have modified the tsmtpd.ini file (as per a suggestion from Trend Micro support) to prevent acceptance of 8bitMIME:

# 8.5
# If 0, then 8BITMIME (RFC 1652) disabled.
#
#Enable8BitMIME=1
Enable8BitMIME=0

The theory is that if 8 bit mime is disabled then IMSS will not receive it and therefore not have problems forwarding it to the downstream mail server. (I suppose the originating mail server should recognize that SMTP on IMSS does not accept 8bit and therefore deliver 7bit instead.)

After restarting the server, this change did not help. I still get the error.

Next I tried a setting from the older version, 5.7, which would convert 8bit mime to 7bit for downstream mail servers that no not support 8 bit. I made the following entry in tsmtpd.ini:

# 8.5a (added by Lance Prager, Computer Upgrades, 5/21/07)
# if Yes then 8-bit Mime messages are automatically converted to 7-bit for
# downstream MTA
#Transfer827=yes
Transfer827=1

(I also tried Transfer827=yes). After restarting the server, none of this had any effect either.

I am begining to think I am the only user foolish enough to upgrade from 5.7 to 7.0 so I am really the beta tester. If there is anyone else who has experience with version 7.0 of IMSS and can help me resolve this problem I would be eternally grateful. I have been suffering through Trend Micro tech support for days and they really do not seem to know any more about this product than I do (and there is no documentation past the getting started guide).