I created a test email on my server with a REPLY TO going to a yahoo address and it was delivered.
phpmailer is a common library for sending emails. I used that library in the updated mail_php.php file. I'm probably going to update our email program to use that library in a future release since it is robust and well tested.
My conclusion is that there was a combination of our script and your host that resulted in the problem. I'm not giving them all of the blame, but they didn't provide any information on what it was about our script causing the problem, so I couldn't fix our script either. That is what let me to use an entirely different email library.
I also didn't see their simplified test, so I couldn't compare that to ours and analyze differences there either. The reality is that I don't know the cause. Our script works on our servers and not yours. A different script works on both servers, so it definitely points to your host not liking something about our script, but it doesn't establish cause or effect. In other words I don't know if they rightly or wrongly didn't deliver the email or whether it was due to a problem in our script or on their server. I simply don't have enough information to come to any conclusions since I don't have any error logs or data on why it wasn't delivered.
I'm not writing it off. I'm accepting that it may or may not be an issue with our script. I'm proposing a long term solution of moving to the phpmailer code base in a future version, and I've already fixed the problem for you on your server in a way that you can repeat on other machines if necessary.
Writing off an issue would be saying "its not my problem, it's theirs" and not proving any evidence or solutions. That is not what I did. That is what your hosting company did.
What I did was solve your problem even without knowing the cause. I gave you files you can use to solve your problem on other sites if necessary. I tested your issue on multiple servers to determine how widespread it might be, and still implemented a fix for the problem without fully understanding the cause or if it was our problem to begin with. I also plan on implementing a similar solution in a future version just in case the problem is ours since I see that at least in your case it resolved the problem. That isn't what writing off a problem looks like.
You are welcome anyway,