We had another user with a similar situation where sending from BatchPatch in normal mode worked fine, but SMTP timeout would occur when sending email from the BatchPatch service instance. After review the Exchange logs we discovered the the Exchange “Tarpit” feature, which is an anti-spam feature, was the cause for the issues. While we don’t know why the Tarpit would be triggered only when emails were sent from the service instance as opposed to the normal BatchPatch instance (both use identical code for sending email), the problem was easily resolved by disabling the Tarpit feature on the Exchange BatchPatch receive connector.
