I am able to send email to individual users but when not when they are in a distribution group. When I do I get this report.

The message could not be delivered because the recipient's destination email system is unknown or invalid. Please check the address and try again, or contact your system administrator to verify connectivity to the email system of the recipient. #5.3.1

However, like I said before I can select their name from the GAL and send mail that way. Their email address is exactly the same in both the GAL and distribution group. The only difference is these users have external email addresses.

Windows Server 2003 Exchange Server 2003 Outlook 2007 and 2010.