Sendmail did not issue MAIL/EXPN/VRFY/ETRN during connection to MTAPossible Fix: The client may not be authenticating properly with the mail server. If the client authentication is selected then try setting the authentication mode to "pop then smtp"
(may be forged), reject=550 Possible Fix: Often you will get relay denied because of DNS issues check that you have added all the host names in the /etc/hosts file and that the server can resolve the hostname for your MX record and all host names associated with the domain and IP addresses.
... Relaying denied
The notice "MAIL/EXPN/VRFY/ETRN during connection to MTA" usually indicates a dead connection. Meaning that they connected to your smtp port and just quiting out. You can duplicate this message yourself just by telneting to your smtp server and typing quit after it sends it's connection notice. This doesn't mean that they're not sending anything to the smtp server, just that it doesn't recognize what they've sent as a valid command at that point in the process.
We had this problem with a RHEL4 sendmail server and fixed it by going into the account settings for the outgoing server (SMTP) and unticking the 'Use name and password' box.