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Event ID: 520 Source: SMTPSVC

Virtual Server 1: The specified mail drop directory (MailDropDir) is not valid. Cannot start the SMTP service in mail-drop mode.
I had this event occur after I moved the Exchange folders to another drive. Even after reinstalling, the SMTP Pickup Directory path would just refuse to change. I was able to cure it by running ADSIEdit per the instructions in ME327021. (Note: In Windows 2003, this has changed a little; ADSIEdit is now an MMC snap in).
As per Microsoft: "Reset the mail drop directory in the Properties dialog box for the domain in Internet Service Manager."

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