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issue sending email from AS400 to exchange 2007 distribution group

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we have sent emails from our AS400 to distribution groups before, but this is the first time I have created a new group since we upgraded from 2003 to 2007 exchange.

the email fails, saying it is due to "#550 5.7.1 RESOLVER.RST.AuthRequired; authentication required"

yet we have been emailing to other distribution groups without any issues.

the AS400 is in a receive connector, and it has been working fine, and does work fine for everthing else but this group.

here is the error:

CUSTOMERSERVICEALL@MYDOMAIN.COM
Your message wasn't delivered because of security policies. Microsoft Exchange will not try to redeliver this message for you. Please provide the following diagnostic text to your system administrator.

_____

Sent by Microsoft Exchange Server 2007

Diagnostic information for administrators:

Generating server: exchange 2007

CUSTOMERSERVICEALL@MYDOMAIN.COM
#550 5.7.1 RESOLVER.RST.AuthRequired; authentication required ##

Original message headers:

Received: from mydomain.com (xxx.xxx.xxx.xxx) by mail.mydomain.com
(zzz.zzz.zzz.zzz) with Microsoft SMTP Server id 8.3.83.0; Fri, 23 Aug 2013
15:53:47 -0400
Date: Fri, 23 Aug 2013 15:53:00 -0400
From: SERVICEEMAIL <SERVICEEMAIL@MYDOMAIN.COM>
Subject: BLDDUPPO LIST PO
To: <CUSTOMERSERVICEALL@MYDOMAIN.COM>
Message-ID:
X-Priority: 3
X-MSMail-Priority: Normal
X-Sensitivity: Normal
X-Mailer: KeyesMail 8.2
MIME-Version: 1.0
Content-Type: multipart/mixed; boundary="--=_M082315531."
Return-Path: SERVICEEMAIL@MYDOMAIN.COM


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