Wow, ok, finally figured it out.
Our domain used to be hosted on the server I was trying to send an email to. We moved it to the new box, updated the DNS, but never actually deleted the account on that old hosting account (on which my buddy's other site and email (email@example.com) are hosted).
I guess the receiving server was getting confused and was trying to verify if 'noreply' account exists on the old server. GRRRR
So sorry guys. At least I got a chance to learn what every single configuration does in Postfix! Thanks for helping me out.