Another Alerts Question

I have two Sharepoint test systems. Alerts won't work on either - never have.

I have a MOSS 2007 Standard install - 1 web server, 1 SQL server - and a WSS 3.0 install - 1 web server 1 SQL server.

On each server the Immediate Alerts timer job status reads Initialized, 0%.
I've done most of the testing on the MOSS 2007 system,
The timer service runs on a domain account that is local admin on both the web and SQL server
This system is part of an intranet
I've tried pointing to our exchange server that serves as an SMTP server and to the local SMTP server on the web server.
I can send email via telnet from the web server to the local SMTP and to the Exchange server and I get emails back fine from both.
I'm able to set up immediate alerts - they show up in the db - but never register in the SMTP log as being sent.
When I try to set up a new alert, the web page hangs and never finished executing, although the alert registers in the db.
When I change something on the site that has an alert tied to it, it adds a record to the event cache table.

I'm really stuck here. I've double-checked all the services (tried alternate admin acocunts), ran filemon and SQL profiler to see if something looks hung, but I can't find anything.

Any ideas... anyone?