The AcceptMessagesOnlyFrom parameter takes only a RecipientIdParameter[], which means it's got to be an AD Object. So, I tried creating a Contact Object with the external address specified, but emails are still being bounced.
What is the correct way to restrict the sending to a distribution group to a specific set of addresses not found on the exchange system?
It looks like you're 90% of the way there already w/ the contact object.
Have you unchecked the "Require that all senders are authenticated" in the "Message Delivery Restrictions" of the distribution group's properties? (I'm assuming that your external sender isn't using authentication, as is typical with messages received from the Internet.)
By default, distribution groups in Exchange 2007 only receive from authenticated senders.
make sure everything is propagated to the edge server.