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Email configuration error caused the message to bounce between two servers or to be forwarded between two recipients

Experts,

I am having a problem sending faxes from desktop; we installed a GFI Faxmaker 14 for Exchange in 2007 and it was working until recently. What changed? there was a problem with the VoIP system and we needed to uninstall and reinstall IIS. the GFI Faxmaker is installed on a W2003 R2 Server SP2; we setup a smarthost in the IIS Virtual SMTP server.
Our Exchange 2003 mail server is on a different box (W2003 SP2 Standard); we created an SMTP connector for the GFI fax server.
We also changed the relay configuration in exchange to only allow the local servers by adding the IP's.

when I send the faxes from the desktop, i get the following error:

Your message did not reach some or all of the intended recipients.

      Subject:      TEST
      Sent:      5/14/2009 2:41 PM

The following recipient(s) cannot be reached:

      fax@faxmaker.com on 5/14/2009 4:49 PM
            A configuration error in the e-mail system caused the message to bounce between two servers or to be forwarded between two recipients.  Contact your administrator.
            <FAXserver.mydomain.com #4.4.6>

Please help!!
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Suraj
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in shot you are using the fax machine to relay out using your exchange server.. right?

create a new receive connector on the exchange server... and put in the ip of your fax box...
and on that recevic connector chack mark the box which says : "externally secured"
restart the transport service
check if its working....

xsam
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ASKER

thanks x-sam,
question: Can I create a receive connector in Exchange 2003? if so, how?
Thank you,
Noo ...
on exchange 2003 it uses the default smtp virtual server to receive emails.
there is no receive connector on exchange 2003.
Hope that answers all... ;-)

x-sam
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ASKER

OK, I mentioned on my original question: "Our Exchange 2003 mail server is on a different box (W2003 SP2 Standard); we created an SMTP connector for the GFI fax server".
We were able to send faxes before, but we had to uninstall/reinstall IIS on the server that holds the fax server and that's when the problems began.
Instead of looking at the Exchange server, do you think I should look at IIS on the fax server?  I am just not sure where to troubleshoot; when I check the installation instructions on GFI's website, everything should be working but it is not.
They suggest we should uninstall and reinstall the fax server; I would like to do that as the last option.
Please help anyone!!
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Suraj
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the same box holds the VoIP system; therefore, there is a smart host set; according to the message is trying to relay. This server is listed in the Exchange box to relay.
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It turns out I needed to set users to use fax server's IP as the mail server and remove the SMTP authentication. After making those changes my faxes started going out.
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Thank you for all of your help - I really appreciate it.