Business Notifications - Email Problem

I am working my way thru the Business Notifications setup. Everything seems to be working (so far) except sending email. I am using the IIS Virtual SMTP Server to relay email to an external SMTP host. I am able to send mail thru this relay using an Outlook Express client. This leads me to believe the SMTP relay is properly configured. When attempting to send from Business Notifications the following 2 errors are logged in the event viewer. Any thought?

Message 1

The following exception occured when trying to send out notification email: The message could not be sent to the SMTP server. The transport error code was 0x80040217. The server response was not available
at System.Web.Mail.SmtpMail.LateBoundAccessHelper.CallMethod(Object obj, String methodName, Object[] args)
at System.Web.Mail.SmtpMail.CdoSysHelper.Send(MailMessage message)
at System.Web.Mail.SmtpMail.Send(MailMessage message)
at Microsoft.BusinessSolutions.BusinessNotification.NotificationService.SmtpDeliveryProtocol.SendSmtpEmail(String senderEmail, String recipientEmail, String subject, String body, String culture) Please make sure that you have configured your SMTP server correctly, and this machine can relay emails through that server, and that the there are no misspellings in the name (IP address) of your SMTP server you have specified.

message 2

A delivery failure was reported.
EventParameters:
Distributor ID: 1
Distributor Name: SERVER1
Delivery Channel Name: SMTPNotificationChannel
Notification ID: 5
Notification Class Name: NotificationsOfScheme79683007_4d30_4f18_9c30_e4fe7d25076a
Notification Status Info:
Notification Text:
Notification Sent Time: 08/29/2007 01:10:27

InstanceName: BusinessNotificationInstance
ApplicationName: MBSBN
Component: Distributor
ComponentDetails: DistributorName: SERVER1
Thread: 19