It appears that one user is sending an email to a distribution list on the same server/domain on Exchange 2007 and getting the following bounce back message: 550 5.7.1 resolver.rst.notauthorized.
After checking several posts I have determined that within “Mail Flow Settings”–> “Message Delivery Restrictions” –> the “Require that all senders are authenticated” box is already unchecked.
Any other suggestions would be greatly appreciated.