Relaying emails from an internal sendmail server to an Exchange 2007 transport server will work for AD users recipients, but not for AD distribution lists.
The error given by the Exchange server is :
550 5.7.1 RESOLVER.RST.AuthRequired; authentication required
In order to allow emails coming from an internal sendmail server, you can disable the authentication on this distribution list :
Edit the distribution list property in the Exchange Management Console, mail flow settings tab, Message Delivery restriction and then uncheck "Require that all senders are authenticated.
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