Bounce's when sending to an Address from a Forwarding Rule on Exchange 2007

Please confirm my theory:
1. You are forwarding some mail that fires a rule.
2. This rule wants to forward to an external recipient
3. The mail that triggers this is from an external sender

Sorry, my error, should be:
1. You are receiving some mail that fires a rule

1. Yes, mail being sent in to my users also is set to forward to an outside account.fires off a rule to it.
2. Yes, it does want to send to an outside recipient.
3.  ?, not sure I follow.
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Well, i just found out, here is how i am set up.  We have an outside vendor that runs email cotinuity with us meaning they have an exchange server that runs with mine so in case of an event we go down, my users can log into there site and still send and recieve.  I was told by them that i had to create mxswitch forwarding rules meaning anything sent to there email was also being copied over to their sytem.  Well, that was working just fine on my Exchange 2003 system but noticed that when i migrated over, something wasnt working.  I just was researching further into this and notice its really my Distrubtion lists that are having the problem sending to the members that are part  of it.  For one, i even tested trying to send something to myself internally and couldnt, i dont even get a bounce back, it just doesnt appear.
Another example is I just used my technology group and there is only me and my IT manager on that list.  When I send to it, I got the error you see below.  Somehow, the distribution list is not going to the members on that list in which the members on that list are also being copied the messages to that MXSwitch forwarding rule to the outside.
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Delivery has failed to these recipients or distribution lists:

GDenagall MXSwitch
The e-mail system had a problem processing this message. Microsoft Exchange will not try to redeliver this message for you. Please provide the following diagnostic text to your system administrator.

JWilliams MXSwitch
The e-mail system had a problem processing this message. Microsoft Exchange will not try to redeliver this message for you. Please provide the following diagnostic text to your system administrator.

Diagnostic information for administrators:
Generating server: SATURN.hq.pcma.org

gdenagall@pcma.org.mxswitch.com
#< #5.6.1 smtp;554 5.6.1 Body type not supported by Remote Host> #SMTP#

JWilliams@pcma.org.mxswitch.com
#< #5.6.1 smtp;554 5.6.1 Body type not supported by Remote Host> #SMTP#

Original message headers:
Received: from Saturn2.hq.pcma.org ([192.168.1.22]) by SATURN.hq.pcma.org with  Microsoft SMTPSVC(6.0.3790.3959); Tue, 17 Jun 2008 11:11:36 -0500
Received: from Saturn2.hq.pcma.org ([192.168.1.22]) by Saturn2.hq.pcma.org ([192.168.1.22]) with mapi; Tue, 17 Jun 2008 11:11:36 -0500
Content-Language: en-US
MIME-Version: 1.0
Content-Type: text/plain; charset="us-ascii"
Content-Transfer-Encoding: quoted-printable
Return-Path: <JWilliams@pcma.org>
X-OriginalArrivalTime: 17 Jun 2008 16:11:36.0892 (UTC) FILETIME=[D18487C0:01C8D094]
X-MimeOLE: Produced By Microsoft Exchange V6.5
accept-language: en-US
Content-Class: urn:content-classes:message
Subject: Test
Date: Tue, 17 Jun 2008 11:11:35 -0500
Message-ID: <5626C15E8B15544E8DE29DF9DAAA0F5E05926E4459@Saturn2.hq.pcma.org>
X-MS-Has-Attach:
X-MS-TNEF-Correlator:
Thread-Topic: Test
Thread-Index: AcjQlNDEiK66BpVHTQW6q4heKcNzbQ==
From: Jason Williams <JWilliams@pcma.org>
To: Technology Group <TechnologyGroup@pcma.org

I also get alot of these errors popping up in my EMC on my EX07, can you tell me what thye mean and how I can get them fixed?
Pic.jpg

I've got the picture: You CANNOT use a rule to both receive and forward, that's SPAM
Of course Microsoft see to that ! Need more info?

You cannot ask two question in one .... please behave or read the rules:
https://www.experts-exchange.com/help.jsp

Yeah, im sot sure if im following about the recieve and forward mail.  So, i cant use the method to where if i recieve anything to my inbox it will not also forward to any outside account as well.  You could do that on Exchange 2003 though right?  Yeah, could you clarify for me a little bit more, please thanks?

im sorry, please diregard that question with the pic!

I understand and will do that after i have solved this case, my apologies.