i have figured it out.
I have 2 nics on that box. 1 should have been used by default. the 2nd nic had a gateway to another inet connection. when i was telneting (and even remoted into the server)for some reason it was using the 2nd nic, even though i thought i had set the binding orders for the nic 1 to be primary. not sure why it would not allow to certain mail servers but after i disabled the 2nd nic telnet worked fine and queus cleared out.