you config is somewhat messed_up, but it think this is not an issue here.

are you sure your fastcgi_process is able to deliver more than 520 parallel
connections?


http://wiki.nginx.org/EventsModule#worker_connections -> to be defined in
event {}

max clients = worker_processes * worker_connections 

In a reverse proxy situation, max clients becomes 

max clients = worker_processes * worker_connections/4

Posted at Nginx Forum: 
http://forum.nginx.org/read.php?2,240989,240991#msg-240991

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