> Any dns experts on the list?

I'm not an expert but 

> ...The server needs to do dns lookups for our clients, 

That's not a problem as long as you allow outgoing DNS traffic on your
firewall (or in your case cisco router)


> and needs to be available to other internet DNS servers for 
> information on domains we host.

I assume this service is provided to the entire world because this
DNS-server is one of the primary DNS-servers for at least one public domain
name.
Question: what type of queries are this you describbed above? Are they
querrieng info's about domain names you're hosting or are this requests for
completely other domains and your server does the lookup and report the
result to the client. If this is the case you should disable this in your
DNS-server configuration.

For more help you maybe need a real DNS expert...

Markus

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