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The problem with local groups is that they are not known on the server
On F9 it usually checks all mail addresses. It seems you've entered the preference 'Not expand personal Groups' in the "Delivery Options"
Try to remove that flag and then Press 'F9' --> it should expand the groups and ask you on ambiguous names.
Then it should work.
To remove that option follow this Support Entry
Feedback response number DHAA7PND3C created by ~Rex Brewelitgon on 02/27/2009