Sendmail Configuration on SunOS 5.7

We’ve just installed SunOS 5.7 on a sun4d sparc database server and we’re having problems with sendmail not being able to send mail to anything other than users on the local host. The DNS seems to be setup ok since nslookup works. The returned mail contains this wording ‘Host unknown (Name server: mailhost.: host not found)’. Does anyone have any ideas where to look?