How to Masquerade the Domain

This server is sending email successfully aS user@myserver.mydomain.com. However, I'm trying to masqurade user@myserver.mydomain.com as user@mydomain.com using the MASQUERADE_AS parameter. I have not been successful.

This is the /etc/mail/sendmail.mc as it stands at the moment:

==================================================
divert(-1)
dnl This is the sendmail macro config file. If you make changes to this file,
dnl you need the sendmail-cf rpm installed and then have to generate a
dnl new /etc/sendmail.cf by running the following command:
dnl
dnl        m4 /etc/mail/sendmail.mc > /etc/sendmail.cf
dnl
include(`/usr/share/sendmail-cf/m4/cf.m4')
VERSIONID(`linux setup for Red Hat Linux')dnl
OSTYPE(`linux')
dnl Uncomment and edit the following line if your mail needs to be sent out
dnl through an external mail server:
dnl define(`SMART_HOST',`smtp.your.provider')
define(`confDEF_USER_ID',``8:12'')dnl
undefine(`UUCP_RELAY')dnl
undefine(`BITNET_RELAY')dnl
define(`confAUTO_REBUILD')dnl
define(`confTO_CONNECT', `1m')dnl
define(`confTRY_NULL_MX_LIST',true)dnl
define(`confDONT_PROBE_INTERFACES',true)dnl
define(`PROCMAIL_MAILER_PATH',`/usr/bin/procmail')dnl
define(`ALIAS_FILE', `/etc/aliases')dnl
dnl define(`STATUS_FILE', `/etc/mail/statistics')dnl
define(`UUCP_MAILER_MAX', `2000000')dnl
define(`confUSERDB_SPEC', `/etc/mail/userdb.db')dnl
define(`confPRIVACY_FLAGS', `authwarnings,novrfy,noexpn,restrictqrun')dnl
define(`confAUTH_OPTIONS', `A')dnl
dnl TRUST_AUTH_MECH(`DIGEST-MD5 CRAM-MD5 LOGIN PLAIN')dnl
dnl define(`confAUTH_MECHANISMS', `DIGEST-MD5 CRAM-MD5 LOGIN PLAIN')dnl
dnl define(`confTO_QUEUEWARN', `4h')dnl
dnl define(`confTO_QUEUERETURN', `5d')dnl
dnl define(`confQUEUE_LA', `12')dnl
dnl define(`confREFUSE_LA', `18')dnl
dnl FEATURE(delay_checks)dnl
FEATURE(`no_default_msa',`dnl')dnl
FEATURE(`smrsh',`/usr/sbin/smrsh')dnl
FEATURE(`mailertable',`hash -o /etc/mail/mailertable.db')dnl
FEATURE(`virtusertable',`hash -o /etc/mail/virtusertable.db')dnl
FEATURE(redirect)dnl
FEATURE(always_add_domain)dnl
FEATURE(use_cw_file)dnl
FEATURE(use_ct_file)dnl
dnl The '-t' option will retry delivery if e.g. the user runs over his quota.
FEATURE(local_procmail,`',`procmail -t -Y -a $h -d $u')dnl
FEATURE(`access_db',`hash -o /etc/mail/access.db')dnl
FEATURE(`blacklist_recipients')dnl
EXPOSED_USER(`root')dnl
dnl This changes sendmail to only listen on the loopback device 127.0.0.1
dnl and not on any other network devices. Comment this out if you want
dnl to accept email over the network.
DAEMON_OPTIONS(`Port=smtp,Addr=127.0.0.1, Name=MTA')
dnl NOTE: binding both IPv4 and IPv6 daemon to the same port requires
dnl       a kernel patch
dnl DAEMON_OPTIONS(`port=smtp,Addr=::1, Name=MTA-v6, Family=inet6')
dnl We strongly recommend to comment this one out if you want to protect
dnl yourself from spam. However, the laptop and users on computers that do
dnl not have 24x7 DNS do need this.
FEATURE(`accept_unresolvable_domains')dnl
dnl FEATURE(`relay_based_on_MX')dnl
MAILER(smtp)dnl
MAILER(procmail)dnl
Cwlocalhost.localdomain
FEATURE(`genericstable',`hash -o /etc/mail/genericstable.db')
FEATURE(`masquerade_envelope')
GENERICS_DOMAIN(`myserver')
GENERICS_DOMAIN(`myserver.mydomain.com')
GENERICS_DOMAIN(`localhost')
GENERICS_DOMAIN(`localhost.localdomain')
MASQUERADE_AS(`mydomain.com')
MASQUERADE_DOMAIN(`myserver.mydomain.com')
================================================

I have generated the sendmail.cf file using m4 /etc/mail/sendmail.mc > /etc/sendmail.cf.
I have hashed the /etc/mail/genericstable table successfully, repeatedly.
Testing with sendmail -bt, 0 seems to indicate everything is ok.
The only log I know to review for possible errors is /var/log/maillog.
As I said, it's working, but it's really not a valid domain.
Not being a Sendmail expert, I have reconfigured it many times now, and barring a few typos, nothing I configure seems to make the slightest difference in the result. Any help would be greatly appreciated!

Thanks!