I’ve since confirmed that normal WordPress notifications are working for users who have email addresses with country code extensions. (I asked one of these users to retrieve their password from the login screen and they received the resulting email message sent from WordPress.) So the problem seems to be specific to BuddyPress private messages.
Here’s where we encounter the error. First we go to the Members tab and select a member. On that member’s page, we click the “send private message” button. After filling in the email form and submitting, the page is returned with this error: “There was an error sending that message, please try again.” This only happens when attempting to send to a user with a country code extension in their email address. (We figured this out by looking at the user accounts that we couldn’t send messages to – the ones that triggered the error all had email addresses with country codes.)
Paul – we are using the standard WP user account usernames for login, not email addresses. I didn’t do the original WP install, but I checked the wp-config file and I didn’t see anything relating to compatibility mode.