I agree with Bachstelze about your mail server thinking it's final destination for mydomain.com
I don't know how to configure sendmail to fix this.
Debian uses exim4, which would probably work with Ubuntu as well.
If you decide to use this, you can run
Code:
dpkg-reconfigure exim4-config
to set it up and (re-)configure it. Your best bet would be "no local delivery" and/or "domains this system should accept mail for:"(leave blank, or put only the server's FQDN)
edit:
didn't see Bachstelze post.
you probably better try his suggestions first.
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