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Staged Migration problems with Office 365

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Hello, i have this issue i am experiencing with Staged migration and was hoping anyone who has gone through it could explain how to sort this out.

I am on Exchange 2003 and i have verified my domain using Txt record only. I have migrated my own account as test to the cloud and was successful. I have also synced all users to the cloud. I can access the cloud mail easily use OWA and mobile access without any issue. I can send emails to all other domains and all emails goes direct to my cloud account and not onsite anymore. However i have the following issue which i hope someone could help me out

1) My account in the cloud cant send to users on premises but can send to other domains

2) I cant connect to desktop outlook. I can using IMAP but thats does not come with contacts,calenders.

I will like to know how to resolve this issues as i will like to migrate 10 users soon and would not want them to have this issues. I can manage without the second issue but the first issues needs to be fixed before i can migrate other users.I will also be glad if i can hear from spiceheads who went through this stage and how they got on without affecting day to day activities

l will like to solve this without Migrationwiz .


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