SMTP Broken on SBS2003 - POP3 connector fails to distribute mail correctly

I have a SBS2003 SP2 Premium customer with 10 workstations. Recently a third party installed two items with my blessing, both of us being on-site. The first item was a hotfix for an "paperless office" application they had already installed on the server.  This hotfix was to address speed issues the users complained about in relation to this application.

The second item was a performance monitoring agent that was to track ongoing performance and upload reports and stats to the third party's server. This was going to help us identify any resources that may be limiting the performance of the third party's application.

The hotfix required a reboot of the server. Once it was installed we both left the office when everything appeared to be working OK, leaving the client to advise us both if any improvement had been noticed with the application.

I received a call a few hours later advising that no email had been received since I left the office. The client is one branch of an organisation that has 20+ offices. Email for this organisation is directed to a mail host, and each office has a POP3 connector that collects just their employees mail from the mail host, ie they do not host their own email.

What was happening was that the POP3 connector in SBS was collecting the email, but it was leaving it in "Failed mail". The process of sorting who each message is to, and dropping it in the correct mailbox was not working.

The SMTP service is started and running.

The third party suggested that the failure may have been due to a Windows update that had been downloaded previous, but not implemented until the reboot of the server, hence it may have nothing to do with his hotfix or monitoring agent.

The third party's agent and paperless office application both use email as part of their functionality, but not SMTP according to the provider.

With advice from an Exchange helper I manually cut and pasted the mail from the "Failed Mail" to the "Pickup" folder. The event log lists the problem as shown in the attached bitmap screen shot. For each pop3 retrieval attempt three errors were left in the event log.

I have read similar posts here, but not found a solution.

I have now set up as an emergency fix the POP3 connector on Outlook clients to retrieve mail instead of using the server, and that connector is placing it in exchange mailboxes.

While solving the immediate problem, and actually bringing other benefits (more frequent than 15 min email checking), there are downsides such as the laptop warriors who VPN in have subtle issues, and the Blackberry application on the server only sees and sends emails once the laptop guys log in via VPN and open Outlook. So if the laptop users are on the road and can't leave the computer running and on line, they don't get their emails, which defeats the purpose a bit.

Ideally I am after a complete solution. Preferably one that doesn't involve uninstalling and reinstalling Exchange.

If not, I am happy in the medium term to automate the cut and paste function from failed mail to Pickup. I am not a command line genius, so treat me kindly. Using the DOS "move" command and inverted commas surrounding the from and to paths I get error messages saying that "the system cannot find the path specified". I have double checked the spelling of my move batch file line and can see no errors. Am I missing something with move, ie is there an equivalent of xcopy or robocopy for the Move function, or is there another way to achieve the outcome I intend (eg xcopy, then del *.*).

Even having this work around would take alot of pressure off me.

Can anyone see a downside in move the files using a scheduled task batch file?
Does anyone know how to cut and paste from these locations?
Does anyone know how to fix the root cause of the problem?

dead-pop3.bmp