Your SMTP server is returning an error after GT::Mail::BulkMail sends a RCPT TO line. You should get the actual error the mail server is returning in your error logs or in shell (if you run nph-email from shell). My guess is that your mail server has a 1000 e-mails per connection limit or something like that.

edit: I forgot to ask if I could get the error message that the server is returning. I think the probable solution to this problem is to get BulkMail to try to reconnect, but the sticky issue here is it getting into a loop in retrying.

Adrian