Well, I have bad news and good news. The bad news is I had to nuke my server and reinstall 10.3.8. The good news is since then, there has been no problem with mail.
I copied my pref files from server admin, CCC the drive to my external firewire, wiped the drive and then reinstalled 10.3, then installed the 10.3.8 combo update. I am not taking it to 10.3.9.
I already have 10.4, but in talking with my apple rep, he advised doing the 10.3.8 reinstall instead of 10.4 until some of the bumps had been smoothed out.
Best of luck on your machine.
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