It looks to me like you have removed some of the parameters that are sent to Authorize.net.
In the XML you send, the line item is sent to authorize.net as:
x_line_item=C4-HE255<|>1<|>550<|>YES
this looks like it correlates to:
id<|>quantity<|>price<|>taxable
the string they expect is:
id<|>name<|>description<|>quantity<|>price<|>taxable
you have removed the name and description elements from the local checkout server behavior.