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Exchange 2003 Error Code NDR 3018

Last Modified: 2012-07-27
All of a sudden all of our outbound emails are getting stuck in the smtp queues.  All the different queues (hotmail, aol, gmail, etc) are loaded with emails being sent to the same fake person outside of our company.  I've gone through and deleted thousands of the emails but I'm not making any progress.  Here is an example of one of the errors:

Event Type:      Error
Event Source:      MSExchangeTransport
Event Category:      NDR
Event ID:      3018
Date:            7/3/2012
Time:            12:57:29 AM
User:            N/A
Computer:      MALLEYS00
A non-delivery report with a status code of 5.4.0 was generated for recipient rfc822;c.lungren@sbcglobal.nbet (Message-ID <MALLEYS00J7BzKkc1F900003aa8@mail.malleys.com>).  
Causes: This message indicates a DNS problem or an IP address configuration problem  
Solution: Check the DNS using nslookup or dnsq. Verify the IP address is in IPv4 literal format.
For more information, click http://www.microsoft.com/contentredirect.asp.
0000: ef 02 04 c0               ï..À    

I did nslookup on our exhange server and it appears to be OK:  malleys00.chocolate.local and the server is

I just did a test and sent an email in from my gmail account and that is now stuck.

We were having problems that all the space on our server's C: disappeared and Exchange stopped working.  I've gone in and moved about a gig of space, then mounted the "store" and that seemed to clear up.  Now I'm wondering if maybe sometime of spam issue is what closed us down.  Our IT guy was let go on Friday afternoon so I can't get details regarding the space issue.

How many queues (and how big) are normal?  Right now I have a yahoo queue with 11,780, an aol queue 9,500,  and a hotmail 9,000 (among others).
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