Hey Tyler, it looks like it's trying to use NTLM to authenticate but it's never sending the initial NTLM data in the request. This is how NTLM normally works,
Clients sends: AUTH NTLM [base64 encoded initial message]
Server sends: [base64 encoded challenge response]
Client sends: AUTH NTLM [base64 encoded authenticate message that's validated by the server]
So the client, the Xerox machine, isn't sending that first message in the auth, which is why the login fails. I did find a Microsoft documentation that shows SMTP can actually send the AUTH NTLM command without including the initial message. I'll add this to our bugs list for us to fix. I don't have a Xerox machine to test against though but I can supply you with a custom build if you wouldn't mind testing it out.
Larry Duran
Software Developer
SmarterTools Inc.
www.smartertools.com