Error setting up third email domain on exhange box, outside emails bounce, internal emails work...

I've read through this site for about three days but I'm not getting something right. Here is the layout, please feel free to ask for more details if needed...

Internal Domain: domain.loc
Primary exchange: (working correctly)
MX for primary: (example only)
example address:

Secondary email address for only 3 users: (works and one person has multiple email addresses)
MX for secondary: (example only)
example address:, same person has (all work)

ISSUES STARTS HERE: Our owner had his own exchange server but due to security issues he wanted it moved to our main location. Instead of having to keep his box (which only forwarded to our box) we want to move his domain email to our corporate exchange server.

Pointed his MX to:
His domain:
I've gone into his domain account, mine and his assistant and added
When I send from Outlook INSIDE the company everything works fine. If I use an external account such as Yahoo or Gmail I get the error:

Sorry, we were unable to deliver your message to the following address.
Remote host said: 550 5.7.1 Unable to relay for <> [RCPT_TO]

I've scoured my internal DNS and exchange to see how the domain works and the domain does not. I see no differences and I'm getting nervous calls from the owner.
BrandonProject Manager, IT Systems and Software DesignAsked:
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You need to change the DNS settings for the domain as well. Where does it point to at the moment?
BrandonProject Manager, IT Systems and Software DesignAuthor Commented:
The A record for 'mail' points to the same IP as the MX record. (This is how all three domains are setup as well.)
And this IP belongs to you? Who hosted his mail before you took it over?
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BrandonProject Manager, IT Systems and Software DesignAuthor Commented:
Yes, this is our IP. As stated, we hosted it in a different building across town. We wanted to move it for security reasons and instead of having his mail server sitting on our network forwarding email to our server we want to just have his email go directly to our server.
BrandonProject Manager, IT Systems and Software DesignAuthor Commented:
Upping the point value since I need to resolve this today.
Oh ok. The IP address it pointed to in the old building and the IP address in the new building is diffirent? You'll have to ask your ISP to change their DNS settings to point mail to the new IP, otherwise no mail will be delivered to your Exchange.
BrandonProject Manager, IT Systems and Software DesignAuthor Commented:
Jo...the DNS setting IS changed.
Ok... And you added the recipient policy on your exchange?
BrandonProject Manager, IT Systems and Software DesignAuthor Commented:
I've been in IT for 15 years and when something does not work it's always the stupidest thing that ends up being the solution.

I have a sonicwall spam filter...the MTA had to be updated and it does not do that through exchange.

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