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Moderated Public Folder to external contact

I've created a moderated public folder in Exchange 2007 to be used to control what email is allowed through an all employee distribution list. I followed the instructions for how to do this at the following site.....

http://www.amset.info/exchange/groups-moderated.asp

This is working exactly as  I want it with one exception. All internal users receive the emails properly but any mail enabled contacts do not receive it.

Basically there is a moderated public folder created with an email address of all.staff@domain.com. Per the setup from the site above approved emails get forwarded to all.staff2@domain.com whose members are all of the employees as well as some external addresses setup as main enabled contacts (user@otherdomain.com).

If an email is sent to all.staff@domain.com and approved it gets received only by the internal users of @domain.com none of the external email addresses receive it. To test things I sent an email directly to all.staff2@domain.com and it gets received by everyone on the list, both internal and external.

So something appears to be happening with how Exchange forwards the email from the moderated folder. Anyone have any ideas on how I can get this to work with the external email addresses?

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Steven Wells
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Is there any downside to turning this option on?
No real downside. Normally it's a business choice. For example, if it's on, people can setup their outlook to autmatically forward replies etc. If it's off, then these things don't work.
Well thanks for your help, your solution worked great.