Hey @Gary Williams,
Not sure that I fully followed your question, so if you have more details that may help.
With that said, one of the hard and fast rules of Office 365 is that they do not allow unauthenticated relay. You HAVE to authenticate to send mail from Office 365.
So if you are trying to use O365 to send, it wont work without authentication.
I have also had allot of problems with email being accepted that does not have a "sender" listed. There needs to be something in the mail from: header for it to accept. So if you are sending too Office 365, see if you can add a sender (even if you are not authenticating off of your local server) and that should help with delivery.
adam
