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ES-100 Mail loops back to myself

Currentyly I have a Barracuda spam filter and am trying to replace it with a Sophos ES-100.  We are running Exchange 2003 and a SonicWALL firewall.  Email flows just fine through the Barracuda but when I disable the Barracuda and enable the ES-100 all external email is bounced back with a message  "<email@domain.com>: mail for [xx.x.xxx.30]:25 loops back to myself." Outbound email flows through the ES-100 and internal email works but inbound email does not.  

I've tried Sophos support and this is the reply I got back "The very first thing that you will want to do on the appliance is double-check all of the settings listed user Configuration>>Routing. You will also want to review your Additional Policies, as several of the configurable Main Actions can be used to readdress, redirect, or re-route emails."  [#3208490]  I looked through the Configuration>>Routing but everything is setup like our Barracuda.  If anybody has any ideas what I can do to fix this problem it would be greatly appreciated.

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