sendmail error, "MX list for mydomain.com points back to server.mydomain.com"

I'm at my wits end.
running 12.4 release, recently upgraded from 12.3
I can't receive any mail,
although I can send (at least to an external account of mine) ok.
But using the "mail" command on the local machine has the same problem 
as incoming
mail from outside, e.g.
   mail -s "local to local" user@mydomain.com
fails the same way incoming mail from outside fails:

/var/log/maillog:

  SYSERR(root): MX list for mydomain.com. points back to mydomain.com
  sm-mta[42872]: 34HHlVD9043017: to=<user@mydomain.com>, delay=00:00:00, 
xdelay=00:00:00, mailer=esmtp, pri=33742, relay=mydomain.com., 
dsn=5.3.5, stat=Local configuration error
  sm-mta[42872]: 34HHlVD9043017: 34HHlVDA043017: DSN: Local configuration 
error
  sm-mta[42872]: 34HHlVDA043017: Losing ./qf34HHlVDA043017: savemail 
panic
  sm-mta[42872]: 34HHlVDA043017: SYSERR(root): savemail: cannot save 
rejected email anywhere

Running dns and mail from same box.

my isp has bogus dns entries for my domain; trying to get that 
straightened out,
but they are extremely slow responding.
Regardless, since this is happening on delivery to the local machine,
sendmail should be dealing with info returned from my local server, 
right?
Not sending queries upstream for mydomain.com?

The local zone file looks like this:

$TTL  3600
@ IN  SOA myserver.mydomain.com. root.mydomain.com.  (
         2023051705
         14400 ; Refresh delta, seconds (4 hrs (recommended))
         3600 ; Retry delta, if refresh fails, seconds (1 hr, 
recommended)
         3600 ; Expire, seconds (1 hrs)
         600 )  ; Minimum time-to-live, seconds (10 min, for testing)
   IN  NS  myserver.mydomain.com.  ; authoritative name server
   IN  NS  ns.secondary1.com.
   IN  NS  ns.secondary2.com.
mydomain.com. IN A aa.bb.cc.dd     ;
myserver      IN A aa.bb.cc.dd     ;
mydomain.com. IN  MX  10 myserver.mydomain.com.     ;
mydomain.com. IN SPF "v=spf1 +mx -all"  ; allow MX record IPs to send, 
no others
mydomain.com. IN TXT "v=spf1 +mx -all"  ; allow MX record IPs to send, 
no others
ns     IN      CNAME   myserver  ; nameserver cannot be CNAME; here for 
refs from stale dns

Queries from outside and inside to mydomain.com seem to work fine, e.g.
   dig @mydomain.com mydomain.com -t mx
   ;; ANSWER SECTION:
   mydomain.com           3600    IN      MX      10 
myserver.mydomain.com.
   ;; ADDITIONAL SECTION:
   myserver.mydomain.com. 3600    IN      A       aa.bb.cc.dd

/etc/resolv.conf:
nameserver 127.0.0.1

What does sendmail do to resolve the MX that could make it come to this 
conclusion?
I don't see anything more helpful in a debug log or the sendmail README.

Suggestions for how to debug?

Thanks,

Gary