I created a new Dist group testdist@domain.com and gave "SELF" Send as Rights using the ADUC GUI.
I still get the undeliveravble message from exchange.
I was unable to add testdist to the security tab of the testdist@domain.com object.
I also waited 24 hrs to allow any changes to propigate into our environment.
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Delivery has failed to these recipients or groups:
You can't send a message on behalf of this user unless you have permission to do so. Please make sure you're sending on behalf of the correct sender, or request the necessary permission. If the problem continues, please contact your helpdesk.