You need to look at the following:
1a. Do you have your domains in /etc/mail/sendmail.cw or
1b. Do you have your domain defined in the Cw variable
in /etc/mail/sendmail.cf
2. Do you have your domain(s) defined in /etc/hosts
3. Do you have your domains defined in DNS?
The unresolvable host response - especially if it is doing this on _your_ box - is ususally an indication that sendmail doesn't know what the domain name is on the box itself. Adding all permutations of your domain name in /etc/mail/sendmail.cw, stopping, and restarting sendmail may fix it.
Given "domain.blah" your sendmail.cw entries may consist of the following (assuming your DNS points the various records to this machine)
------------------- sendmail.cw example ---------------
localhost
domain.blah
ns1.domain.blah
mail.domain.blah
smtp.domain.blah
www.domain.blah
--------------------------------------------------------------
You will then need to confirm that you have these names either in /etc/hosts or in your DNS. If you run DNS but not on this box then edit /etc/resolv.conf and add your nameservers.