550 Requested action not taken: mailbox unavailable

I setup a small box with Server 2003 64bit to be used as a webserver and email server for a small school. Real simple stuff for a few users. A simple website and a handful of emails. rDNS and spf records setup and pass every test I found including test at dnsstuff.com.

Email sending to almost every email address (google, hotmail, aol, whatever) works. However, with one domain, I get an bounce back with the error.

550 Requested action not taken: mailbox unavailable

It's another school running Exchange judging from some packet sniffing with WireShark. Every email on this domain I have tried sending to gives this error. The email address is valid as I can send to it from my personal, and gmail account without a problem.

Does anyone know of some anti-spam software that gives an 550 error like the above? What else could this be?

Thanks for any suggestions.

Packet capture of the two servers communicating look like this.

220 <server snip> Microsoft ESMTP MAIL Service, Version: 6.0.3790.3959 ready at  Sat, 2 Oct 2010 12:48:17 -0700 
EHLO <email snip>
250-<server snip> Hello [<ip snip>]
250-TURN
250-SIZE
250-ETRN
250-XXXXXXXXXX
250-DSN
250-ENHANCEDSTATUSCODES
250-8bitmime
250-BINARYMIME
250-XXXXXXXX
250-VRFY
250-X-EXPS GSSAPI NTLM LOGIN
250-X-EXPS=LOGIN
250-AUTH GSSAPI NTLM LOGIN
250-AUTH=LOGIN
250-X-LINK2STATE
250-XXXXXXX
250 OK
MAIL FROM: <email snip>
250 2.1.0 <email snip>....Sender OK
RCPT TO:<email snip>
250 2.1.5 <email snip> 
DATA
354 Start mail input; end with <CRLF>.<CRLF>
<email body here>
.

550 Requested action not taken: mailbox unavailable
QUIT
221 Goodbye

You might consider making contact with the admins/postmasters of that domain. They may be able to provide more specific details as to what is triggering the rejection by their system(s).