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setting up Sendmail for intranet without dns server

Neo_13
Occasional Visitor

setting up Sendmail for intranet without dns server

I have set up a red hat 9.0 box at home as a mail server, it works perfectly if a dsl link has been established and the external ip address is used.

However, if only the ethernet connection is up, it takes very long to authenticate users logging in and the e-mails are not delivered to the local accounts once they have been sent to local accounts (sending also takes very long (+30sec) to authenticate and send).
I will be moving the linux box to a different network, where it won't be connected to the internet through a dsl link.

I've tried disabling the ident lookup by defining: define(`confTO_IDENT', `0')dnl, which had no affect.

Which security checks or whatever else could be causing the delay and preventing the e-mails from being delivered to the local accounts on my linux box?
How do I solve this problem?
Do I need a dns server?

Any help would be appreciated
Thanks