Outbound Mail not being accepted: connection refused

For some reason yet to be determined I none of the users in our local network can send mail. Everything was working finne the other day then all of a sudden, one by one, all users lost the ability to send mail externally.
The SMTP error log was reporting a relay access error for users the I enabled the Login Authentication for SMTP and the messages seemded to be going through. But the messages now are not leaving the server apparently. Even though the mail clients send the message successfully, the messages are not making it out of the server.
Here is my postconf -n:
always_bcc =
command_directory = /usr/sbin
config_directory = /etc/postfix
daemon_directory = /usr/libexec/postfix
debugpeerlevel = 2
enableserveroptions = yes
inet_interfaces = all
luser_relay =
mail_owner = postfix
mailbox_transport = cyrus
mailq_path = /usr/bin/mailq
manpage_directory = /usr/share/man
mapsrbldomains =
messagesizelimit = 20971520
mydestination = $myhostname,localhost.$mydomain,saintmichaelschool.org,mail1.saintmichaelschool .org,192.168.181.2
mydomain_fallback = localhost
myhostname = mail.saintmichaelschool.org
mynetworks = 127.0.0.0/8
mynetworks_style = host
newaliases_path = /usr/bin/newaliases
queue_directory = /private/var/spool/postfix
readme_directory = /usr/share/doc/postfix
relayhost = mail1.saintmichaelschool.org
sample_directory = /usr/share/doc/postfix/examples
sendmail_path = /usr/sbin/sendmail
setgid_group = postdrop
smtpdclientrestrictions =
smtpdenforcetls = no
smtpdpw_server_securityoptions = login
smtpdrecipientrestrictions = permitsasl_authenticated,permit_mynetworks,reject_unauthdestination,permit
smtpdsasl_authenable = yes
smtpdtls_certfile = /etc/postfix/server.pem
smtpdtlsloglevel = 0
smtpduse_pwserver = yes
smtpdusetls = no
unknownlocal_recipient_rejectcode = 450
I'm obviously a novice with mail servers so any hepl is greatly appriciated.
Here is a line from my SMTP log from the sample message I'm trying to send:
Feb 16 11:19:46 mail postfix/smtp[18133]: AEF07178F4F: to=<[email protected]>, relay=none, delay=3897, status=deferred (connect to mail1.saintmichaelschool.org[65.173.83.122]: Connection refused)

I had a dig around google on the postfix 502 error and found one reference which stated that ...
Permanent Errors
These indicate a permanent error and tell the sending system to bounce the message:
502 Command not implemented
http://www.answers.com/topic/simple-mail-transfer-protocol
If this is the case then the 502 error I got when telneting in would we taken as a final failure notice and they would not bother retrying, as I did.
I've no idea why it would be giving this error. Unless someone else can chip in with more info... ?
You can check for the error by connecting from a remote location by telnet...
======================================
In Terminal, type: "telnet mail1.saintmichaelschool.org 25"
there is a space beteen your hostname and last "25". This tells Telnet to connect on SMTP port 25.
You should get a response:
Trying... x.x.x.x....
Connected to.... dah de dah... your.server.name ESMTP Postfix
Type: "MAIL FROM: [email protected]" where [email protected] is any email address
Response: 250 ok
Type: "RCPT TO: [email protected]" where [email protected] is the recipient in your domain
Response: 250 ok
Type: "DATA"
Response: 354 End data with... dah de dah...
Type a message and finish it with a "." (period) on a line by itself.
Response: OK: queued as... dah,de,dah.
Type "QUIT" to exit
===========================
I was getting the 502 error immediately after the Mail From command. If I repeated it, it was accepted OK. However, it looks like a sending server does not try repeating it.
Good luck!
-david

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