How to remove bad Outlook cached items
In Outlook, click on:
Tools >> Account Settings...
Highlight the Exchange account and click Change...
Take the check box out of the "Use Cached Exchange Mode" and click Next then Finish. Click Close.
Bring up a new email and begin to type the name in the To: field. As the name comes up in the drop down use your arrow keys to highlight the name and hit delete. This will remove the name from the cache.
Close the message without sending and close outlook. It needs to be completely closed so a look in the active processes may be necessary. If in doubt, a logoff will do.
Open Outlook and send an email to the account for testing.