I'm confused. I'd expect the above symbol listing to show that sendmail is in fact using the libwrap library and it should be doing what the allow/deny files say.
Regardless, the simple way to tell sendmail what you want to permit is to use the /usr/mail/access file.
My goal was to block *ALL* IP access to port 25. Incidentally I found some other ports that shouldn't have been exposed so those were closed off as well.
thanks
Sean