The situation does not happen under normal conditions, but only, when nsd is running out of resources. I have seen this happen only on openacs.org, which has quite limited resources (little memory, slow cpu). For a while, openacs.org went every night into a state where it did not respond to any request. For a while, members of the OCT restarted openacs.org each time it hangs (typically every day/night at least once). Without being able to fix this problem on the configuration level, the oct members decided in begin of dec 2006 to upgrade openacs.org to aolserver 4.5 with the hope, that the problem will vanish. However, upgrade did not help in this regard.
At that time i started to look more detailed into the problem, and found out it happened when all connection threads became busy and still more requests are queued. The problem was that every connection thread after the other went into a busy loop until reaching a complete freeze if the server. After running fine for a while, first only one connection thread went under high load into a busy loop (load 1, cpu 100%) while the server was still responding. Some time later, a second and third connection thread did the same (e.g. load 3), making the resource situation worse. Finally, when all connection threads went busy, the server hangs and stops replying.
Already in jan 2006 Jeff Rogers sent a patch for aolserver 4.0 to the aolserver list, dealing with a problem he was running into when benchmarking aolserver/openacs with ab (apache benchmarks). While benchmarking openacs aolserver run out of resources and reached a hang. Although he reported different symptoms (no busy cpu) i "ported" the patch to aolserver 4.5 . Since the patch is applied on openacs.org (mid of dec 2006), no hangs appeared again.
The patch was accepted for aolserver 4.0 and 4.5. For more details, see http://sourceforge.net/tracker/index.php?func=detail&group_id=3152&atid=103152&aid=1615787
Tom, are you asking out of academic interest, or do you have problems with the patch, or are you fighting similar symptoms?