Our logs were showing lots of repeated send failures from Hotmail.
A closer investigation of the issue has revealed that Hotmail has suddenly decided that the mail RFC’s are too good for them to follow.

RFC’s are the standards which define how things work. When people don’t follow the standards, this makes things break.

In this case, it meant that all mail from Hotmail was being rejected, this is a Hotmail is broken issue!
Getting Hotmail to change their broken setup is likely to be non-productive – there are already a few pages of complaints about it on their site, complete with the boilerplate totally useless replies from drones who don’t understand the issue, despite it being helpfully spelled out for them.

See here –
http://windowslivehelp.com/community/p/127432/474962.aspx
http://windowslivehelp.com/community/t/123986.aspx

Unfortunately, while bouncing invalid email content is correct from a technical perspective, our clients need to be able to receive mail from Hotmail.
As an interim solution, I’ve patched qmail to allow for bare linefeeds.

This was fairly easy – a small patch to qmail-smtpd.c, a recompile, then restart qmail-smtpd.

To patch, look for switch(state) in qmail-smtpd.c, and remove the straynewline(); calls, so that barelinefeeds are accepted.
Code to change below:

case 0:
if (ch == '\n') { state = 1; break; }
if (ch == '\r') { state = 4; continue; }
break;
case 1: /* \r\n */
if (ch == '.') { state = 2; continue; }
if (ch == '\r') { state = 4; continue; }
if (ch != '\n') state = 0;
break;
case 2: /* \r\n + . */
if (ch == '\n') return;
if (ch == '\r') { state = 3; continue; }
state = 0;
break;