[cd34]

First of all, you are doing:

deny from .domain.com

This may not do what you think it does especially since I see some names in there that are probably meant to block hotlinking from those sites in particular.

But, that's not where this particular .htaccess rule is killing you. Because you have a deny from .domain.com, you are forcing apache to do a reverse DNS lookup on EVERY request for every file served under that .htaccess.

If you get hit with a ton of hotlinking, apache waiting for the DNS resolution will hold open threads and possibly exceed maxclients while it is trying to see if it should allow the person. I would bet if you removed the deny from statements, while it isn't the best set of rules, the machine would run much better and you would be rid of your server busy messages.

Exceeding MaxClients will give the Server Busy message.