MonkeyClicker

Event Type: Warning
Event Source: smtpsvc
Event Category: None
Event ID: 4006
Date: 1/1/2009
Time: 10:06:08 AM
User: N/A
Computer: SRV-2K3-PDC
Description:
Message delivery to the host '207.115.11.16' failed while delivering to the remote domain 'bellsouth.net' for the following reason: An SMTP protocol error occurred.

That event can occur when a remote host drops your smtp connection, typically due to an invalid PTR record, or no mail server at that address.

Not taking into account simple typos in e-mail addresses. Some domains are particularly restrictive when it comes to whom they accept mail from, hotmail.com being one of them. These server may not be accepting connections from your IP, you may want to look into your smtp related configuration.

Ensure your not listed in an Spam Databases, iptools.com has a decent spamdb lookup tool.
Also be sure to have a proper PTR record configured for your IP address, you can speak to your ISP about that as they manage the IP space and do not typically delegate that ability to clients.

Try adding the IP address of the web server in the Relay Restrictions of its
SMTP server. In other words,

Say the IIS Server that sends the e-mail has an IP address of
192.168.168.25.

1. Go to the IIS Admin MMC ~ the SMTP Server properties ~ Access
~ Relay
2. Choose "Only the list below" and add 19.168.168.25 to the list
3. Leave bottom checkbox checked that talks about authenticated users
4. Hit OK and mail should immediately be delivered

Hope this helps, this just worked for me and I have been battling the same
scenario you described for the past 6 days.