Actually, re-reading your first mail, it sounds like your server is not giving the correct handshake. I'm surprised the mail really goes through -- it errors before it even composes. I don't think it is timing out though, usually that error says something like "timeout reading smtp host" (been there, done that).
_ns_smtp_recv $rfp 220 $timeout You might try putting a catch around the line listed above (in _ns_sendmail) and then send a peice of test mail. If it works with no problems, then you need to fix your mail server handshake.
