Restrictions on sending to DL's or Contact

It seems as though that a previous administrator may have had some work done to our Exchange 2003 server to prevent users from being able to send email to certain recipients ( which are listed as contacts in AD) w/o authorization. We assumed that it was checking the contact for this certain external recipient that we had setup before sending the message. To try and get around the issue we simply deleted the contact. When using OWA messages seem to be getting delivered now.  When trying to use outlook in cached mode, we seem to still be having a problem but different.  When the messages is sent to their email address (externaluser@theirdomain.com) we get a NDR that was the message could not be delivered to (externaluser@ourdomain.com).  Its flipping their domain for ours and it generates the NDR because we don't host a mail box for that user account here and its trying out email server is trying to deliver it locally. I can't think of any reason why this change the destination domain at all.

Also if there was any custom changes that were made when we were on Exchange 2003, we have since moved to 2007.  We ran into some bumps in the road with our migration because we ran into some "custom" fixes such as this.

It also looks like it is trying to refer to a OU and CN that do not exists anywhere in our AD environment. It looks like it may have been a configuration that existed some time ago, but nothing that is current.
Diagnostic information for administrators:
 
Generating server: MAIL.company.local
 
IMCEAEX-_O=COMPANY_OU=Georgia_cn=Recipients_cn=externaluser@company.com
#550 5.1.1 RESOLVER.ADR.ExRecipNotFound; not found ##
 
Original message headers:
 
Received: from MAIL.company.local ([192.168.1.8]) by MAIL.company.local
 ([192.168.1.8]) with mapi; Mon, 6 Jul 2009 10:55:20 -0400
Content-Type: application/ms-tnef; name="winmail.dat"
Content-Transfer-Encoding: binary
From: "user" <user@company.com>
To: "External User"
	<IMCEAEX-_O=company_OU=Georgia_cn=Recipients_cn=externaluser@company.com>
Date: Mon, 6 Jul 2009 10:55:18 -0400
Subject: test
Thread-Topic: test
Thread-Index: Acn+Scd+dvAujJX/RtuqGbtxNElOIA==
Message-ID: <36F2A068FC958043B9456BA46014E2F711F65482C5@MAIL.company.local>
Accept-Language: en-US
Content-Language: en-US
X-MS-Has-Attach:
X-MS-TNEF-Correlator: <36F2A068FC958043B9456BA46014E2F711F65482C5@MAIL.company.local>
MIME-Version: 1.0

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JoyCaraAsked:
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SubsunCommented:

Check the attributes for contact, proxyAddresses (you can see in email tab) & targetAddress (in exchange general tab, normally the primary address of contact). Sometimes due to some permission issue the editing in email tab will not het reflected in target address, this may cause NDR.
What you see in the contact > exchange general is the destination address for contact : If the destination address is invalid the the contact will give a NDR message.

Since you have deleted the contact you may download the latest address book in outlook. and see if you are able to see the deleted contact in GAL.

If not just try sending test mail by typing the external address in TO field.

If yes you may have to wait for OAB generation of you may force the OAB generation and again download the NEW OAB in outlook and test the mail flow.
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JoyCaraAuthor Commented:
Had to restore the old AD objects than found a work around with a security group they ahd in place
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