MS Exchange Transport Error; Event ID 7004; 504 5.7.1

I am seeing the following errors in the Application Log of my Exchange server.  Any Clues on how to fix it.  I've googled it with varying answers.

Thanks!

Event Type:      Error
Event Source:      MSExchangeTransport
Event Category:      SMTP Protocol
Event ID:      7004
Date:            5/13/2009
Time:            7:52:16 AM
User:            N/A
Computer:      MERCURY
Description:
This is an SMTP protocol error log for virtual server ID 1, connection #435. The remote host "135.196.34.235", responded to the SMTP command "xexch50" with "504 5.7.1 Not authorized  ". The full command sent was "XEXCH50 2004 2  ".  This will probably cause the connection to fail.

For more information, click http://www.microsoft.com/contentredirect.asp.
___________________________________________________________________________
Event Type:      Error
Event Source:      MSExchangeTransport
Event Category:      SMTP Protocol
Event ID:      7004
Date:            5/13/2009
Time:            7:42:11 AM
User:            N/A
Computer:      MERCURY
Description:
This is an SMTP protocol error log for virtual server ID 1, connection #434. The remote host "207.224.186.221", responded to the SMTP command "xexch50" with "504 5.7.1 Not authorized  ". The full command sent was "XEXCH50 2616 2  ".  This will probably cause the connection to fail.

For more information, click http://www.microsoft.com/contentredirect.asp.
__________________________________________________________________________
Event Type:      Error
Event Source:      MSExchangeTransport
Event Category:      SMTP Protocol
Event ID:      7004
Date:            5/13/2009
Time:            6:28:40 AM
User:            N/A
Computer:      MERCURY
Description:
This is an SMTP protocol error log for virtual server ID 1, connection #432. The remote host "69.15.3.20", responded to the SMTP command "xexch50" with "504 Need to authenticate first  ". The full command sent was "XEXCH50 3404 2  ".  This will probably cause the connection to fail.

For more information, click http://www.microsoft.com/contentredirect.asp.
nmwco-itAsked:
Who is Participating?
 
MesthaCommented:
I don't think you have anything to worry about. You simply have logging turned up too high.
Exchange is talking to another Exchange server, and is being told to go away when it tries to communicate with another Exchange server, so then falls back to the regular SMTP transfer.

XEXCH50

is how Exchange servers identify each other.

Simon.
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Rajith EnchiparambilOffice 365 & Exchange ArchitectCommented:
Is the email going out?

If not, it looks like your ip is not authorized to send emails. Any smarthost or sending directly?
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nmwco-itAuthor Commented:
No, I dont have any smarthosts that I know of.  (I inherited the network about a year ago, but this problem has just started to occur in the past 3 months)  We have not made any changes internally.  

As far as the email going out, I am unsure.  I am unable to tell from the error what user is sending the email that generated the error message.  
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