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Local loop detected after migrating from Exchange 2003 to Exchange 2010

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Hi,

I have migrated about 60 users from exchange 2003 to exchange 2010  (migration is not yet complete), and now have a very strange problems.

Problems:

1. End user gets and error 0x8004010f when they click on Send/Receive.

2. Status of MS Outlook appears to be Connected than Online

3. When someone sends email to any of these users (internal or external), I find local loop detected error in the submission queue and sender of the mail finally receives a bounce with reason "max hop count reached" or "user unknown"

4. When I send email from Exchange Shell it gives undeliverable message to the sender but if I use -credentials <admin id> parameter, I get authentication error.

Note: check and confirmed that there are no mail forwarding rules set  for these users.

5. Users are not able to receive emails over OWA also (OWA is set for intranet only)

Please troubleshooting ideas ???


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