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checked the file, no "masquerade as" but i did find this line at the bottom of the file "Cwlocalhost.localdomain". could this be where it's getting localhost from?
DAEMON_OPTIONS(`Port=smtp,Addr=127.0.0.1, Name=MTA')
dnl NOTE: binding both IPv4 and IPv6 daemon to the same port requires
dnl a kernel patch
dnl DAEMON_OPTIONS(`port=smtp,Addr=::1, Name=MTA-v6, Family=inet6')
dnl We strongly recommend to comment this one out if you want to protect
dnl yourself from spam. However, the laptop and users on computers that do
dnl not have 24x7 DNS do need this.
FEATURE(`accept_unresolvable_domains')dnl
dnl FEATURE(`relay_based_on_MX')dnl
MAILER(smtp)dnl
MAILER(procmail)dnl
Cwlocalhost.localdomain
dnl #
dnl # The following example makes mail from this host and any additional
dnl # specified domains appear to be sent from mydomain.com
dnl #
MASQUERADE_AS(`domain.com')dnl
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