The problem:

You do not have permission to send on behalf of the specified user when trying to send via Outlook 2003. However all mailbox permissions are correct. Can't send any messages, can recieve fine though, you may see an warning event log message on the exchange server each time the user tries to send.

The cause:

Anyways, the PC stored the password for the exchange profile and I ended up adding another profile and deleting the initial profile (cause I messed up)…and now the PC still had the old password saved but using the new profile…so now the user received the now infamous “‘You do not have permission to send on behalf of the specified user’” message.

The Fix:

1. Go to Start ->Run -> Type "control keymgr.dll"

2. Now you can either delete the stored password for your FQDN exchange server or edit it and make sure the username and password arecorrect

For some reason on our case this has been changed, we believe it was when testing logging in as a different user via webmail and it put the wrong credentials in the windows keychain (didn't know their was one!) so it was logging onto Outlook as the wrong user, and then denying the ability of the user to send a message as them!

Note: there are other causes of this error, but this was very specifically down to the keychain in the user's profile.
Note: Recreating the outlook profile doesn't make any difference.
Note: Recreating the user's profile should delete this keychain and would probably fix the problem too.