Jeff, review this article from M$ Technet, it may shed some light on your situation (it mentions Exchange 5.5 but the problem sounds similar:
PSS ID Number: Q260247
Article last modified on 04-27-2000
winnt:5.5
winnt
======================================================================
-------------------------------------------------------------------------------
The information in this article applies to:
- Microsoft Exchange Server, version 5.5
-------------------------------------------------------------------------------
SYMPTOMS
========
If Exchange Server 5.5 is installed on a Microsoft Windows 2000 domain
controller, some Internet e-mail messages may loop if the following conditions
are met:
- The Windows 2000 domain is .com.
- The Exchange Server Simple Mail Transfer Protocol (SMTP) site address is
.com.
- The domain .com does not have an MX record configured in DNS.
- Exchange Server is configured to re