Email sender does not match notification email and I can't figure out why

The Sender: is something different. The error you’re getting indicates a discrepancy between the “envelope” (RFC821 From address) and the “From:” header (RFC822)

I suspect that emailit (or maybe Discourse, we’ve been rolling our own mail servers for too long) is setting the envelope sender to the email address you’re authenticating with.

I think (!) you should make sure that notification_email and DISCOURSE_SMTP_USER_NAME are the same for emailit.