outgoing mail on Watchguard iii 500 using external port IP address

Hello, I am on Watchguard III 500 with ver. 7.21B2696 policy manager. I just noticed that outgoing email is said to be coming from the ip address of the external port instead of the NAT IP address.

So far I have:

1. checked for entry in 1 to 1 NAT = external, 1 host, nat base (public ip), real base (internal IP of mail server)
2. Checked for exception entry = public IP address of mail server - private ip address of mail server.

My dynamic NAT entries are the default

I have seen a couple of posts about this, but it seems that the 1 to 1 NAT should be translating in both directions.

Thanks in advance, Joschi