That error is extremely vague and really only tells me that the server encountered a problem.
that problem could be anything.
It could be a bad email address in the list causing the SMTP Server to fail.
I have run into a similar issue with a couple hosting providers where an email address with a nonexistent domain would cause the page to time out and return a 503 error instead of just moving to the next one, though this would only happen some times.
It could be you are running into a similar issue.
without a more concrete error message though, it is hard to tell.
