SMTP emails are failing from server

I am having an issue that I could use some help with.

I have a server that sends out SMTP emails through our Exchange 2007 server.  It works fine as long as I use only INTERNAL email addresses, such as:
Mike@mydomain.com
George@mydomain.com
etc.
(Mydomain.com = The name of my current work domain)
However, if I put in an outside domain, such as:
Mike@yahoo.com
The entire SMTP transmission fails.
On my Exchange 2007 server, I allowed this server to send emails through the "Internal Server Relay", which explains why we can send internal emails.  
Any ideas?

Another couples items:

I tested on the server through a Telnet session and it works great when I use the command "helo" and test email internal addresses.  When I try to input the "rcpt to" as a Yahoo email address, it says "550 5.7.1 Unable to relay"
When I try to use the "ehlo" command, it does not work.  It freezes at "250 CHUNKING" and then says "451 2.7.0 Timeout waiting for client input"

The server having the issue sits on the DMZ and needs to pass through the firewall to get to the Exchange server.  I don't believe the firewall is involved being that I can send internal emails, but I figured it was worth mentioning.
ccorino1Asked:
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Burns1978Commented:
hi there

Looks like your exchange server does'nt know where to send outgoing
emails..

Did you set the outgoing connector properly?
Launch the Exchange Management Console.
Expand the Organizational Configuration node.
Select the Hub Transport node.
Click on the Send Connectors.
In the Actions pane, select New Send Connector.
The Wizard will guide you through the options.  In particular look for the Internet option from the drop down box.
Choose a Smart Host, or DNS MX records to send the email.

Hope this help
ccorino1Author Commented:
Thank you so much for the input. I actually just figured it out.
For your reference, here is what I had to do:
In Exchange Management COnsole --> Server Configuration --> Hub Transport
Internal Server Relay --> Properties
Authentication Tab
Select "Externally Secured (for example, with IPSec)"
Permissions Tab
Select Exchange Servers

That seemed to do the trick!

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ccorino1Author Commented:
I was able to figure it out and posted the instructions
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