SOLVED: Email Not Received But No Errors Returned When Sent To Distribution Group on Office365 Hosted Exchange in Hybrid Mode

If you send email to a distribution group that is running off an Office365 Hosted Exchange account that is running in Hybrid mode with your on-premise Exchange server, the email may never be received.  The email happily shows in SENT folder, has no errors or email bounces, and if you trace the email it shows as DELIVERED:

This frustrating situation will occur if two conditions are met:

1. The distribution group is DYNAMIC (i.e. based on filters or an OU)
2. The distribution group was built on-premise Exchange server when it BEFORE it was in hybrid mode with Office365

Fortunately there are two ready solutions for this problem:

1. Delete and recreate the distribution group
2. Run the following PowerShell script changing the obvious fields:

   Set-DynamicDistributionGroup -Identity sales@contoso.com -IncludedRecipients "MailboxUsers,MailContacts" -RecipientFilter {((RecipientType -eq 'UserMailbox' -or 'MailUser' -or 'MailContact'))}

If you want the full Microsoft explanation of the problem see THIS KB article.