I found a problem after using sendmail 8.12.x to send outgoing mail, when the peer server's hostname is localhost.localdomain, then it will turn out local configuration error.
1.assume the mail server for somehost.com is mail.somehost.com
2.when sendmail to a host which hostname is localhost.localdomain (use telnet in order to show hostname)
#telnet mail.somehost.com 25
220 localhost.localdomain ESMTP Sendmail 8.12.5/8.12.5; Fri, 28 Mar 2003 16:40:2
3.then error in log
Mar 24 09:21:06 myhost sendmail: h2O1L6Fv003427: SYSERR(root): mail.somehost.com. config error: mail loops back to me (MX problem?)
Mar 24 09:21:06 myhost sendmail: h2O1L6Fv003427: to=<email@example.com>, delay=00:00:00, xdelay=00:00:00, mailer=esmtp, pri=30357, relay=mail.somehost.com. [202.1xx.1xx.1xx], dsn=5.3.5, stat=Local configuration error
Mar 24 09:21:06 myhost sendmail: h2O1L6Fv003427: h2O1L6Fv003429: DSN: Local configuration error
P.S. if the peer host has a resolvable hostname, then problem can be fixed, also it won't happen prior to 8.11.x or earlier.