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A configuration error in the e-mail system caused the message to bounce between two servers

I am still having the looping error when sending from 2003 account to the cloud through the Exchange 2010 server. I tried already two solutions:
-Unchecked the box “ This Exchange Organization is responsible for all mail delivery to this address according to this below:
http://support.microsoft.com/kb/324732 ( didn’t work)
-Suppress Link State Updates (didn’t work)
http://technet.microsoft.com/en-us/library/aa996728(v=exchg.141).aspx


Here is the issue description and error: Looping issue between 2003 and 2010
The issue is related to the Exchange 2003 server NDR error 5.4.6. It is also logged in the Event Viewer with the event ID: 3020 below: “A non-delivery report with a status code of 5.4.6 was generated for recipient x-ex;/O= INTERNATIONAL/OU=External (FYDIBOHF25SP)/cn=Recipients/cn=bd3fff784a304d6683c02935f37f9e1d (Message-ID <481B48D1DD85704BBC76A10F81C5DF020921813D@domain.net>).  
Cause: A forward loop was detected by the categorizer. This is a common hosting configuration problem caused when someone uses the provisioning tool to create a contact in one organization unit and creates a user in a different organization user that share the same e-mail address.    
Solution: Verify that you do not have a user in organizational unit and a contact in a different organizational unit that have the same e-mail address”.

Your message did not reach some or all of the intended recipients.
     
The following recipient(s) cannot be reached:
            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.


Please help.

Here is little more on the issue:
Mail flow is working all around otherwise from 2k3 to 2010 and back and from 2010 to the cloud and cloud to 2010 Hybrid. I only get this error when trying to send from 2k3 account to the cloud user which has the same domain since this is a Hybrid scenario (coexistence). So, when the 2003 user@domainA.com sends to the user2@domainA.com (which is cloud mailbox) it needs to go through the Hybrid server and it throws back the error mentioned above. From 2010 to cloud no issues.
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claudiamcse
Asked:
claudiamcse
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1 Solution
 
florin_sCommented:
Copy and paste internet header of original email here to see the actual hops of the message -

http://www.mxtoolbox.com/EmailHeaders.aspx
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Vasil Michev (MVP)Commented:
Where is your MX pointing at? Is the 2003 user synchronized to Office 365 (either as mailbox or mail-enabled user)? What is the domain intent set to in Office 365 (authoritative or relay)?
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claudiamcseAuthor Commented:
MX records are pointing to on-prem to Postini. From Postini to 2003 servers. There is routing connector from 2003 to 2010 server. As I said, mailflow is working all around from 2003 to 2010 and back. 2003 user is synchronized to O365 through DirSync. Actually I tried setting up domain to the internal relay instead of Authoritative and it stops the mailflow to the internet to the entire comapny....So, I had to switch it back to Authoritative......Also, when I switched to Internal RElay, I would still get the loop back error right away
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claudiamcseAuthor Commented:
Here is the results from Internet Header analyzer
http://www.mxtoolbox.com/EmailHeaders.aspx 
From

postmaster@domain.com
To
user@domain.com

Date

Sat, 26 Oct 2013 13:02:23 -0400



MIME-Version

1.0
Content-Type

multipart/report; report-type=delivery-status; boundary="9B095B5ADSN=_01CED1C7866628AB000002FDstxhq?nh?ex01.sx"

X-DSNContext

335a7efd - 4523 - 00000001 - 80040546

Message-ID

<A1XvpFVjC00000f6a@ex2003.domain.net>



Subject

Delivery Status Notification (Failure)

Content-class

urn:content-classes:message
Content-Transfer-Encoding

binary

X-MimeOLE

Produced By Microsoft Exchange V6.5

X-MS-Has-Attach


X-MS-TNEF-Correlator

<481B48D1DD85704BBC76A10F81C5DF0209218154@ex2003.domain.net>



Thread-Topic

this test from onprem 2k3 user to the cloud user


Thread-Index

Ac7R1b8kyuPgnnFST1yv6KO3QruQWQ==
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florin_sCommented:
I can not see a lot from the internet header, too much general information.

If you do not wish to post it here for security reasons try to see how many hops are in there maybe you can see who is bouncing your e-mail

here are two examples that can help you troubleshoot:

http://social.technet.microsoft.com/Forums/exchange/en-US/d3b17305-c496-4c71-9bbe-20bf8b4e7442/554-546-hop-count-exceeded-possible-mail-loop?forum=exchangesvrgenerallegacy

http://msexchangeguru.com/2013/07/29/troubleshooting-mail-flow-issues/
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claudiamcseAuthor Commented:
There is no more info available other than I posted it.....pls advice
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claudiamcseAuthor Commented:
I posted everything the entire internet header
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florin_sCommented:
The internet message header should look like my first link from above, i mean this one http://social.technet.microsoft.com/Forums/exchange/en-US/d3b17305-c496-4c71-9bbe-20bf8b4e7442/554-546-hop-count-exceeded-possible-mail-loop?forum=exchangesvrgenerallegacy

Try doing a message tracking maybe you can deduce from there what is going on, or if you can post it here and I can also look over it
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claudiamcseAuthor Commented:
Once we put in place reverse DNS and then made all emails go through 2010, the issue with looping was resolved
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claudiamcseAuthor Commented:
This was the resolution
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