sendmail to a host

[Steve Austin <indydog125_(_at_)_yahoo_(_dot_)_com>]

using openbsd 2.9, and the assoicated sendmail.

If I send email from an node external to my domain (my
domain being foo.com let's say), it bounces back to
the sender with a permanent fatal error:

554 5.0.0 MX list for foo.com. points back to
relay.foo.com
554 5.3.5 <user_(_at_)_foo_(_dot_)_com>... Local configuration error

My MX record looks like:
foo.com. IN MX 30 relay.foo.com.

But, if I send email to user_(_at_)_relay_(_dot_)_foo_(_dot_)_com (again,
from an external address), it works fine...

Other things to note:
in the cf file, I am using "MASQUERADE_AS(foo.com)" as
well as "DOMAIN(foo.com)".

Any ideas?