Question : SYSERR(root): savemail: cannot save rejected email anywhere

Fresh install of CentOS 4 sendmail 8.13 ( I believe)  Sendmail process is running.  Sendmail is ONLY handling mail on this box.  NO RELAYS nor outside connections.  Only want sendmail running to receive log files etc.

Problem is this....not receiving any mail, when I try to send and email via command line the following are propogated in the /var/log/maillog.
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May 10 14:45:59 collie sendmail[32184]: k4AIjxua032184: from=root, size=42, class=0, nrcpts=1, msgid=<200605101845.k4AIjxua032184@collie.bitbybittech.local>, relay=root@localhost
May 10 14:45:59 collie sendmail[32185]: k4AIjxnv032185: tcpwrappers (localhost, 127.0.0.1) rejection
May 10 14:45:59 collie sendmail[32184]: k4AIjxua032184: to=root, ctladdr=root (0/0), delay=00:00:00, xdelay=00:00:00, mailer=relay, pri=30042, relay=[127.0.0.1] [127.0.0.1], dsn=5.0.0, stat=Service unavailable
May 10 14:45:59 collie sendmail[32184]: k4AIjxua032184: k4AIjxub032184: DSN: Service unavailable
May 10 14:45:59 collie sendmail[32184]: k4AIjxub032184: to=root, delay=00:00:00, xdelay=00:00:00, mailer=relay, pri=31066, relay=[127.0.0.1], dsn=5.0.0, stat=Service unavailable
May 10 14:45:59 collie sendmail[32184]: k4AIjxub032184: k4AIjxuc032184: return to sender: Service unavailable
May 10 14:45:59 collie sendmail[32184]: k4AIjxuc032184: to=postmaster, delay=00:00:00, xdelay=00:00:00, mailer=relay, pri=32090, relay=[127.0.0.1], dsn=5.0.0, stat=Service unavailable
May 10 14:45:59 collie sendmail[32184]: k4AIjxub032184: Losing ./qfk4AIjxub032184: savemail panic
May 10 14:45:59 collie sendmail[32184]: k4AIjxub032184: SYSERR(root): savemail: cannot save rejected email anywhere
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Googling and the like point to a problem with the postmaster alias not being there, it is and I have run newaliases.

Sendmail rookie so any assistance would be appreciated.

Answer : SYSERR(root): savemail: cannot save rejected email anywhere

tcpwrappers (localhost, 127.0.0.1) rejection
That's a problem. Your sendmail is using tcpwrappers, and tcpwrappers are configured incorrectly (to reject smtp from localhost). Check your /etc/hosts.allow and /etc/hosts.deny files, also read the manual:
man hosts.allow