I am having a similar issue. I moved a Non profit to Google Apps and setup all the DNS for them to use their domain based mail on google. I have tried to go back into Host Settings and get everything working but to no avail. If I try mail.theirdomain.com the test says it cannot connect to server. If I try aspmx.l.google.com it works on the SMTP test from Host Settings but will not send a Password reminder. aspmx.l.google.com is just one of 7 MX records google had me put into the DNS zone editor. So I was thinking that maybe there is one magical SMTP entry for all of gmail. But I cannot find it.
It is just more confusing that the SMTP test will work but it won't send password reminders or Newsletters. Here is the error on the Newsletter attempt. Maybe it has come clues. I tried a single email to one of my accounts and then I tried to send to Admin role and neither worked.
ActiveTabName: Newsletters
RawURL: /Admin/BulkEmail/tabid/45/Default.aspx
AbsoluteURL: /Default.aspx
AbsoluteURLReferrer: http://assessment.blueribbonschools.com/Admin/BulkEmail/tabid/45/Default.aspx
UserAgent: Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 6.0; GTB6; SLCC1; .NET CLR 2.0.50727; Media Center PC 5.0; InfoPath.2; .NET CLR 3.5.30729; .NET CLR 3.0.30618)
DefaultDataProvider: DotNetNuke.Data.SqlDataProvider, DotNetNuke.SqlDataProvider
ExceptionGUID: 3fc1cb59-11d4-475b-a473-802c2d445887
InnerException: Mailbox unavailable. The server response was: 5.1.1 The email account that you tried to reach does not exist. Please try
FileName:
FileLineNumber: 0
FileColumnNumber: 0
Method: System.Net.Mail.SmtpTransport.SendMail
StackTrace:
Message: System.Net.Mail.SmtpFailedRecipientException: Mailbox unavailable. The server response was: 5.1.1 The email account that you tried to reach does not exist. Please try at System.Net.Mail.SmtpTransport.SendMail(MailAddress sender, MailAddressCollection recipients, String deliveryNotify, SmtpFailedRecipientException& exception) at System.Net.Mail.SmtpClient.Send(MailMessage message) at DotNetNuke.Services.Mail.Mail.SendMail(String MailFrom, String MailTo, String Cc, String Bcc, String ReplyTo, MailPriority Priority, String Subject, Mailformat Bodyformat, Encoding BodyEncoding, String Body, String[] Attachment, String SMTPServer, String SMTPAuthentication, String SMTPUsername, String SMTPPassword, Boolean SMTPEnableSSL)