Sendmail/MX/DNS problem

I've been using my Linux machine as an SMTP/POP3 server for some time now with no problem.  Recently I started using it as a name server for my company's domain.

I can't receive mail now for accounts on this machine, mail destined for other places works fine (ie, someone@linuxbox.mydomain.com can't get mail, but someone@mydomain.com can..I'm using another mail server for mydomain.com mail).

I get the following in the returned message if I send mail to root@linuxbox.mydomain.com:

   ----- Transcript of session follows -----
553 linuxbox.mydomain.com. config error: mail loops back to me (MX problem?)
554 <root@linuxbox.mydomain.com>... Local configuration error

Here's my domain file:

@               IN      SOA     linuxbox.mydomain.com. hostmaster.mydomain.com. (
                                1       ; Serial
                                28800   ; Refresh
                                7200    ; Retry
                                604800  ; Expire
                                86400)  ; Minimum TTL
                        NS      linuxbox.mydomain.com.
                        MX      10 proxy.mydomain.com.

router                  A       207.247.19.33
linuxbox               A       207.247.19.34
proxy                   A       207.247.19.35
                        MX      10 proxy.mydomain.com.

And here's an excerpt from /var/log/messages:

Jun  6 08:56:59 linuxbox sendmail[1964]: IAA01964: from=<root@linuxbox.mydomain.com.>, size=293, class=0, pri=30293, nrcpts=1, msgid=<Pine.LNX.3.96.97060608565
2.1962A-100000@linuxbox.mydomain.com.>, proto=SMTP, relay=root@localhost

Jun  6 08:56:59 linuxbox named[1945]:XX /207.247.19.34/linuxbox.mydomain.com/MX

Jun  6 08:56:59 linuxbox named[1945]: XX /207.247.19.34/linuxbox.mydomain.com/ANY

Jun  6 08:56:59 linuxbox identd[1969]: from: 207.247.19.34 ( linuxbox.mydomain.com. ) for: 1306, 25

Jun  6 08:56:59 linuxbox identd[1969]: Successful lookup: 1306 , 25 : root.root

Jun  6 08:56:59 linuxbox sendmail[1966]: IAA01964: to=<mike@linuxbox.mydomain.com.>,ctladdr=<root@linuxbox.mydomain.com.> (0/0), delay=00:00:00,xdelay=00:00:00, mailer=esmtp, relay=linuxbox.mydomain.com. [207.247.19.34], stat=Local configuration error

Jun  6 08:57:00 linuxbox sendmail[1966]: IAA01964: IAA01966: DSN: Local configuration error

I've tried with and without an MX record for linuxbox.mydomain.com..both results are the same.

Again, right now all mail to mydomain.com goes to another server..only mail to linuxbox.mydomain.com is being bounced.

Any help would be appreciated..thanks.