These are the differences I can see between my setup and yours:
1) In sendmail_path I do NOT set the "-i" flag, as yours does.
2) In sendmail_from I have a legitimate email address, you have no value. It is possible sendmail or php is unhappy about this. I can't be certain though, I know next to nothing about sendmail.
I'll turn this over in my head for a while and perhaps try a couple of experiments. I'll let you know if I turn anything up.