Unexpected service response

I've never had a problem with the SMTP test before. Now, testing a postfix mail server, I get a Yellow alert, and the page says:

Service smtp on mail.domain.com is not OK : Unexpected service response

501 Syntax error in parameters or arguments

I can telnet to port 25 on this server with no problems from the hobbit server, I get a 220 message upon connect. Here is exactly what I get (names and IPs changed to protect the innocent). So what can be the problem here?

[root at hobbit etc]# telnet mail.domain.com 25 Trying 20.30.40.51... Connected to adsl-20-30-40-51.dsl.hometown.isp.net (20.30.40.51). Escape character is '^]'. 220 SMTP service ready

Thanks, Michael