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Routing issue to external recipients in Exchange 2003 to Exchange 2007 migration

I am in the process of migrating a client to Exchange 2007.  I have a legacy Exchange 2003 server which has 150+ mailboxes on it.  I moved one test mailbox to the new Exchange 2007 server.  When I send messages from the Exchange 2007-hosted mailbox to INTERNAL recipients, they receive the messages with no problem.  Mail sent to EXTERNAL addresses outside the organization gets stuck in the "Unreachable Domain" queue on the 2007 server and ultimately generates a NDR.

Users on the 2003 server function normally both ways.  I created a Send Connector on the Organization Hub Transport tab, telling the 2007 server to use the 2003 server as a smart host.  Then the 2007 user could send out to the Internet, but suddenly nobody on the 2003 server could because the servers started complaining that I'd created a loop situation.  I've changed it back to the way that it was and the mail for the 2003 mailboxes is working normally now.

I need to do this migration slowly, so I really need these servers to coexist peacefully for a while.  Can anyone help?  
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cshockey

Personally I would start with Exchange Best Practices Analyzer and make sure everything is configured correctly.  Download at (http://www.microsoft.com/downloads/details.aspx?FamilyID=dbab201f-4bee-4943-ac22-e2ddbd258df3&DisplayLang=en)

1) Verify firewall port rules are established correctly outbound (TCP 25, UDP/TCP 53) from the IP's of your exchange servers.
2) Then I would check to make sure DNS was functioning correctly from all your 2007 servers.  This includes reverse DNS lookups for your external IP's associated with your new Exchange instance (Set this up through your ISP).  A quick way to test MX reslution is...START--> Run --> "CMD"...nslookup --> set type=mx --> {yourdomain.com}...{someotherdomain.com}...you should see mx records reporting for both.
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ASKER

The only issue the BPA reports is that the paging file is larger than the physical memory on my 2003 server.  

This organization uses a Linksys router which allows outbound traffic to flow freely, so there are no outbound ports blocked.  I don't have a separate external IP for the new Exchange server.  We just have a single static IP in place.  I just want the new Exchange server to route its outgoing mail through the 2003 server.  Is there any way to accomplish that without creating a loop?
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Nice work.  This should help a lot of folks.  In place parallel exchange migrations are tricky.
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