Hi there
The firewall we use is Smoothwall
www.smoothwall.net
We are using Smoothwall Corportate server 3.0
After contacting there Technical support, I was told there is no way around this on Smoothwall Corporate server 3.0, as it is part of an antispoofing mechanism.
However they have told me, there is an easy work around on the Smoothwall Advance Firewall vesion 4.
So I will be moving to that this week.
For the moment to get mail sending and receiving
I turned off "Enable DNS lookup" in the MTA and also on the same page
I set "Relay MTA for external delivery" to our ISP's SMTP server as suggested by marcmac
Sending and Receiving mail is working now.
Cheers