Telnetting and send mail throung a squid server

Hi people,

I need some help with squid.
I configured it and it runs like a bomb, with proxying & caching.
But e-mail (SMTP, port 25) does not come through. I can also not telnet
or ping from the inside network to the outside.

The scenario:
Squid 1.1.14 runnning on SCO OpenServer 5.0.4 Enterprise with two(2)
netcards.
Routing between interfaces is disable here. SMTP/POP3 running like a
bomb.

Inside network, NTserver running Exchange Server 5.0. Mail server for
internal network.
The mail get sent to UNIX and stays there, saying there is no where else
to go. At this point they can send mail outwards onto the internet
because in Exchange all mail is forwarded to the UNIX server, and from
there on outward.

If I change the /usr/lib/sendmail.cf file on UNIX and tell it the
smarthost is the internal NTserver, receiving of mail works because all
external incoming mail is sent to the internal NTserver, BUT when I try
to send mail from the inside network out onto the Internet, the mail is
forwarded from NT to UNIX and UNIX checks /usr/lib/sendmail.cf and finds
the smarthost as the NTserver, sends the mail straight back to it - and
so the mail finds itself in a endless loop and mails an error message to
root@UNIX that the max. amount of hops has been exceeded.

Now:
(1) Can one telnet or ping through squid at all?
(2) Can mail pass through squid?

This is very urgent as my ass is on the line at this site.
ALL help will he apppreciated.
Thanks!

--
Regards,
---------------------------------------------
Wim Olivier
Systems Engineer (ACE)
NetActive Networking
JHB, RSA
Tel: +27 11 444-8999    Cell: +27 82 655-3599