mutt with exim4 smtp smarthost rejects mail

[Alex <xlegion@gmail.com>]

I'm running a debian sid server with exim4, dovecot and getmail. It was installed using debchroot and I intend to keep it lean and mean so no X installed.

Sending mail works just fine when connecting with an external imap client but when I log on the server and use mutt my isp's smtp server rejects any mail I try to send. 

I have no clue why it does this? Is there a configuration that needs to be set in exim4? 

Below is my exim4 config:

-- update-exim4.conf.conf --
dc_eximconfig_configtype='smarthost'
dc_other_hostnames='
echo.com:echo:localhost.localdomain'
dc_local_interfaces='192.168.1.3:127.0.0.1'
dc_readhost='echo.com'
dc_relay_domains=''
dc_minimaldns='false'
# Comment to request AUTH
#dc_relay_nets='192.168.1.0/24'
dc_smarthost='mail.myisp.com'
CFILEMODE='644'
dc_use_split_config='false'
dc_hide_mailname='true'
dc_mailname_in_oh='true'
dc_localdelivery=maildir_home
dc_relay_nets=''
--