Any time I attempt to create a Distribution Group with an outside email or a Security Group with an outside email, it fails with the error "Unable to create an e-mail address for the group", and fails out. It never adds any members to the group, and ultimately doesn't look like it actually creates any group at all. Seems to be a recent problem, but I haven't tried to add a group since last year.
I've tried multiple group names, so it's not a duplication problem in that regard.
I've attached the addgroup.log file.