Internal local mail being held in mail box when we have issues with our ISP, and are not able to complete Internet DNS lookup. Not too sure why local internal mail not being routed through to mail boxes.
It sounds like your server can’t find itself. Make sure that you have setup a correct full hostname in the server doc. Then, add the host name and IP address to the host table (CFGTCP - option 10).
You can test it by using the trace command from the Domino console.