We have the following setup:
Redhat kernel 2.4.16
Sendmail 8.11.6
This is a very old, ~7 years, cobalt RaQ server and is not easily 
upgradeable.  Currently, we are being hit by multiple IP addresses from 
Latin America, Russia, Pakistan and others that open SMTP connections to
 our mail server and attempt to send emails from malformed addresses.  
Always missing the top level domain and similar in format to:  
- losingm7@mysterious   
 - kingleirr5@pc
 - etc
 
  Our sendmail responds with:
 sendmail[6973]: n8JABr406973: ruleset=check_mail, arg1=<evangelinaii2@mysterious>, relay=wtl.worldcall.net.pk [115.186.114.184] (may be forged), reject=553 5.1.8 <evangelinaii2@mysterious>... Domain of sender address evangelinaii2@mysterious does not exist
At this point, the attacker sends a RSET command and trys another 
similar but different email address.  We are getting ~2 attempts every 
second from each IP address.  The reason I think this may be a DOS 
attack is that as soon as I kill a connection, within seconds a new IP 
address starts up another attack from a completely new geography.  For 
example, I kill a connection from Chile and another connection from 
Columbia starts 1 second later.  
Obviously, this is causing 
unnecessary load on our mail server and I would like to stop these 
connections at the gateway if possible.  Does anyone have ideas on how 
to fix this?  I realize our mail server is badly in need of replacement,
 and that is in the works, but not complete yet.  What I am looking for 
is a band-aid on this issue.  
Thanks.