check this out from mskb article 245787 from support.microsoft.com
SYMPTOMS
If you send outbound Simple Mail Transfer Protocol (SMTP) mail, a non-delivery report (NDR) similar to the following is displayed:
550 Invalid Domain.
The following NDR is also logged in the application event log:
Event ID: 4031
Source: MSEXCHANGEIMC
Description:
The message could not be delivered. The destination server reported: 550 Invalid Domain.
CAUSE
This problem may be caused by a Domain Name System (DNS) record that points to the wrong mail host for a certain domain. This incorrect DNS information causes Exchange Server to connect to the wrong mail host when you try to send mail to a recipient in another domain, which generates the error message in the "Symptoms" section of this article.
This problem may also be caused by the incorrect configuration of an "echo firewall." The echo firewall is an advanced device that verifies every command that is sent to the Exchange Server computer. This type of firewall cannot be a Network Address Translation (NAT) or packet-filter device. If you incorrectly configure this firewall so that it does not accept mail from a domain that it needs to accept mail from, the error message in the "Symptoms" section of this article may also be displayed. The mail never resides on the firewall, but passes through it.
RESOLUTION
Use the NSLookup utility to make sure that the MX and A records of the Exchange Server domain on the Internet are correct.
If the problem is related to the incorrect configuration of an echo firewall, then correct the configuration of the firewall.
MORE INFORMATION
The error message in the "Symptoms" section of this article is closely related to the following Exchange Server generated error message:
550 Relaying is prohibited
The message route of this topology is:
Sending Exchange Server ----- Internet ------ Firewall ----- Mailhost
