Why the mail error for domains I don't host?

[Bill Vermillion]

The door open and in walked trouble - disguised as our our old
 nemesis Blake Swensen, who uttered, at Sun, Feb 20, 2005 at 19:27 :

> sendmail[93922]: j1L2kZa5093920: SYSERR(root):
> mx1.distinguish.com. config error: mail loops back to me (MX
> problem?)

> I know everyone has seen this message at least once in their
> life from improperly configured sendmail. However, my log is
> filling up with these messages for domains I do not host.... and
> when I dig the mentioned host, it always resolves to localhost
> (127.0.0.1). This happens over and over again on for domain
> after domain. Are there really that many unskilled admins who
> publish their mail server's address as localhost, or is this
> some sort of hack that I should worry about?

I won't call myself unskilled - but I have one domain that 
in desperation I set the MX record to localhost.

I was running about 300,000 spam messages PER DAY to that domain.

Removing the MX record entirely cut me down to 25,000 to 50,000
per day - as people would send the spam to the IP of the
web server.  [both web and MX are on that one machine for a few
domains].

I know it's not supposed to be done, but I did this in
self-defense.

The domain in question has been coming up #1 in Google, MSN, and
other search engines for the past 5 or so years - because it's
on of those domains that has a great name.

During the height of the dot-com boom the owner was offered
$250,000 for the domain - $10K in cash in the rest in stock - which
was the sign of the times then.

We're heading toward our peak which is typically March - and that's
about 7000 sessions/day and about 325,000 hits/day.

Sorry if this site is giving you problems, but I'm open to any
suggestions that will keep the spam away and the 127.0.0.1
is the only one I could come up with.

None of the other domains is set up this way - and all the mail
we host is for commecial sites - with no end-user/home accounts
at all.

Bill

-- 
Bill Vermillion - bv @ wjv . com