Local DNS server help wanted.

[usalabs]

I'm running a web and email server behind a NAT router, but to be able to test the web site(s) and the email server from inside the LAN I had to setup a local DNS server, but, as I have a domain name with associated DNS records at a domain hosting service, the default MX record is set to mail.mydomain.info, along with the associated A record of mydomain.info, I also set my local email server host name to mail.mydomain.com, and set ports 25 and 110 forwarded in the router, but for some reason, when an email is sent from anywhere outside the lan, it does not get to the local mail server, instead it gets returned to the sender with a fatal error, "domain cannot be reached", but I can send emails out using smtp outgoing of the local mail server with no problem, is this a conflict with the DNS records of my domain registrar and my local DNS server?

Also the smtp setting in the php.ini file is set to localhost, and when someone tries to register as a member of my web site, the site auto sends a confirmation email, but it never gets to the recipient, a snippet of the server log shows:-

Wed, 17 May 2006 22:36:30 -> SMTP Connected: Domain=[yahoo.com], Host=[mx2.mail.yahoo.com], IP=[67.28.113.70], Port=[25]
Wed, 17 May 2006 22:36:31 -> SMTP Welcome Received: Domain=[yahoo.com], Received=[220 mta119.mail.re4.yahoo.com ESMTP YSmtp service ready]
Wed, 17 May 2006 22:36:31 -> SMTP Command Sent: Domain=[yahoo.com], Host=[mx2.mail.yahoo.com], Command=[HELO mail.mydomain.info], Response=[250 mta119.mail.re4.yahoo.com]
Wed, 17 May 2006 22:36:31 -> SMTP Command Sent: Domain=[yahoo.com], Host=[mx2.mail.yahoo.com], Command=[MAIL FROM:< postmaster@mydomain.info>], Response=[501 Syntax error in parameters or arguments]