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Cannot resolve name of SMTP host, email alerts from SharePoint

MOSS 2007

I'm trying to set up alerts, mail enable lists yet I continue to get Event ID 6856: Cannot resolve  name of SMTP host, and Event ID 6857: Cannot connect to SMTP host.

The SMTP virtual server is up and running - my SP server.  Should I be using my Exchange server?  I have tried this but I get the same errors.


 These errors are the only ones I see in event viewer.  
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All the errors are followed by what I would characterize as 'oriental characters.'
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*SMTP – Running in Services
Log on as: local system account

*Default SMTP Virtual Server
Running and has been restarted several times
General: IP address, all unassigned
Access > Authentication: Anonymous, although I have tried it several with Integrated Windows Authentication
Access > Relay Restrictions:  Allow all computers which successfully authenticate to relay…
Delivery > Outbound Security: Anonymous access
Advanced: Fully qualified domain used – my domain which includes the exchange server.  Using the Check DNS button returns ‘Valid’

SharePoint
*Central Admin > Operations > Outgoing E-Mail Settings.
Outbound SMTP server: My SP server
From address: My account
Reply to sender: My account

*Central Admin > Operations > Incoming E-Mail Settings.
Enable sites on this server to receive e-mail: Yes
Use SP Directory Management Service to create distro and contacts: No
Accept e-mail from all servers is checked.

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Since I posted I checked prot 25.  I'm getting connection refused so I suspect the port is blocked.  I need to resolve this first.
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telnet mylocaladdress 25 gets a positive response

What hostname have you put in the "outgoing E-Mail Settings"?

*My SP server;

myservername.bigdivision.company.com

and

myservername


Make sure you can ping that name

*I can ping fine


Make sure you can: telnet that_name 25

*I can ping that <name 25>


the above will tell if you 25 is 'listening' or not. If it doesn't open and show headers, SMTP is not open/available and you could be dealing with anything from SMTP is not installed, or the local firewall is not allowing connections to 25

*SMTP installed, service running


If you get an error that telnet is not a valid command, you are probably testing from Vista, Win7, Windows 2003 or 2008 and the "Telnet Client" feature is not installed - install it and try again

*Getting response

Once you can ping and connect, try your stuff again. If still no go, your situation will now probably be:
Relay may not be allowed

*Is this the mail server that handles mail for the particular user I'm sending the alert to?  Can I sepecify another exchange server and then that server should forward to the user at another domain?

Spam blockers might be in the way