My FC3 machine appears to be compromised, please help

[Bob Brennan]

Hello,

I have an FC3 machine that has been running about a dozen websites and
3 dozen mail accounts reliably for more than a year, I stopped
updating about 6 months ago so the versions might be a bit stale but I
would prefer to fix my immediate problem(s) rather than update and
cause new ones. The software I am using that is in question, I
believe, is Sendmail, Dovecote, Procmail, ClamAv, Spamassasin,and
Squirrelmail.

The problem - email into my personal account "bob" @ many different
domains seems to have stopped a few hours ago with the message
"Technical details of permanent failure:
PERM_FAILURE: SMTP Error (state 9): 550 5.7.1 <bob at domain>... Relaying
denied. Proper authentication required."

The log file says -
Apr  6 11:05:59 myserver sendmail[5580]: k36A5wFQ005580:
ruleset=check_rcpt, arg1=bob at domain.xxx, relay=zproxy.gmail.com
[64.233.162.192], reject=550 5.7.1 bob at domain.xxx... Relaying denied.
Proper authentication required.
Apr  6 11:05:59 myserver sendmail[5580]: k36A5wFQ005580:
from=<rbrennan96 at gmail.com>, size=0, class=0, nrcpts=0, proto=ESMTP,
daemon=MTA, relay=zproxy.gmail.com [64.233.162.192]

And there are suspicious emails queued in Sendmail such as:
Thu, 6 Apr 2006 10:17:15 "Bob Brennan"
<bob at wc.funnel.revenuedirect.com.akadns.net>bob at wc.funnel.revenuedirect.com.akadns.net1
kBDeferred: Connection timed out with
wc.funnel.revenuedirect.com.akadns.net.

The obvious clue for me is the
"wc.funnel.revenuedirect.com.akadns.net" that appears to be the
culprit, but it has been too long ago that I considered myself a Linux
expert to remember where to start on this type of thing. Wiping the
machine and starting over is not a good option, and yes I had rsynced
everything important to an FC4 machine only hours before this
happened.

Any clues as to where to start looking please?

Thanks in advance,
bob