Yes, there's a limit, but I think it's a limit on the number of loop iterations, not the # of active connections.
Unfortunately I don't remember what it was, but it was mentioned in an old post of mine - but I can't find it anymore; I think the forum software upgrade purged it.
IIRC, the limit was accidental and fixed in a later version of Toad - have/can you try your script in TDP 3.8 or 4.0?