Also side note, there has been quite a few upgrades to cPanel since (.60)
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Chances are they're using external mail but the domains are in /etc/localdomains so the server is not looking up MX records and is just trying to deliver locally. Check if they are using third party mail services and if they are move the domains from /etc/localdomains to /etc/remotedomains
Not sure. I don't think I have access to this file on my shared reseller hosting.
What could be the issue that I'm looking for?
I've asked my host to resolve the issue, but they can't find anything.
That you are having problems and the host can't resolve it is unheard of. Could you please provide us on WHT with the host so that others can guard against? Its really frustrating as a reseller to refer problems of clients to a host and the host is unable to resolve it. That sucks big time.