Thanks for the response even though I'm not sure what are you asking me now. NOTEBOOK keyword??  Please can you clarify what that has anything to do with listserv not storing received message to archive. I might be confusing archive with the "place" where messages are visible to subscribers when they are using web interface to read posts. 
For the second part, outbound message handler  is working fine when subscription request is made by someone. 
To clarify:
Potential subscriber creates account on the LISTSERV. Confirmation email gets sent to that subscriber asking for confirmation. After subscriber confirms it, another email gets sent to the list owner to approve subscription request. After approval, an email gets sent to subscriber with a welcome message. Now, if subscriber send message to the list, the "sendmail" server accepts it with no problem but LISTSERV is having trouble picking it up from the sendmail server and processing it further. The message just gets lost. No traces in the logs or console about it at all. I hope this clarify my problem better. My question is where I should start looking to find the problem. Are there any manual tests I can do to debug the message flow.

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