I have read all the posts here, and so far I still have the same problem. I have flushed the iptables, can telnet/ssh to the mail server and dns server.

Sending mail locally (intranet) works fine, sending mail to my isp account works fine, sending mail beyond that (say to hotmail.com) does not work, and I can't get mail inbound from anywhere (isp account included).

ADSL router has 3 TZO.com domains (dynamic) which it serves (for argument's sake: dom1, dom2, dom3) and has my dns server listed as the DMZ host (all traffic inbound sent there).

OS: Fedora9.

named config:

//
// named.caching-nameserver.conf
//
// Provided by Red Hat caching-nameserver package to configure the
// ISC BIND named(8) DNS server as a caching only nameserver
// (as a localhost DNS resolver only).
//
// See /usr/share/doc/bind*/sample/ for example named configuration files.
//
// DO NOT EDIT THIS FILE - use system-config-bind or an editor
// to create named.conf - edits to this file will be lost on
// caching-nameserver package upgrade.
//

options {
directory "/var/named";
dump-file "/var/named/data/cache_dump.db";
statistics-file "/var/named/data/named_stats.txt";
memstatistics-file "/var/named/data/named_mem_stats.txt";
allow-query { 127.0.0.1; 192.168.1.0/24; };
recursion yes;
};

logging {
channel default_debug {
file "//var/named/data/named.run";
severity info;
print-category yes;
print-severity yes;
print-time yes;
};
};

zone "." IN {
type hint;
file "named.ca";
};

include "/etc/named.rfc1912.zones";

zone "dom1" {
type master;
file "/var/named/dom1.hosts";
};
zone "dom2" {
type master;
file "/var/named/dom2.hosts";
};
zone "dom3" {
type master;
file "/var/named/dom3.hosts";
};

--------------------
Sendmail config on request

Error message:
Nov 9 21:16:08 dns sendmail[19230]: mA99KZ9l018216: makeconnection (mx2.hotmail.com. [65.54.244.40]) failed: No route to host

It sounds like your ISP is blocking port 25/tcp both inbound and outbound on their network, except to/from their own mail server. You could send outbound mail to other domains by setting up sendmail to authenticate to your ISP's mailserver and use it as a smarthost, but that's not going to help inbound mail reach you.

With the work laptop I RD'd to our work server and ran ping/telnet from there.

The responses I got were:
telnet dns.nmeinc.net -> could not connect to the host on port 23. Connect failed

telnet dns.nmeinc.net 25 -> could not connect to the host on port 25. Connect failed

telnet mail.nmeinc.net 25 -> could not connect to the host on port 25. Connect failed

ping on both machines works fine. mail.nmeinc.net = dns.nmeinc.net

perhaps the telnet port is also being blocked?

NmE

Well hopefully you aren't actually running telnetd on your servers... I sure hope not. It wouldn't have anything to do with e-mail, though.

Port 23/tcp is the default for the actual telnet service. Port 25/tcp is SMTP. People use telnet to connect to port 25/tcp to manually issue commands, to confirm that e-mail service is available. Doing telnet to port 25/tcp has nothing to do with telnet service, and telnet to 23/tcp has nothing to do with e-mail. The telnet command is just a handy interactive TCP client that can be used to connect to any TCP service (which SMTP happens to be).

PS confirms that your ISP blocks port 25/tcp inbound. You could try asking them to unblock it for your IP, but I wouldn't get your hopes up.