Congrats on the digg, I think :)

Seems like you got that part under control now as far as the file descriptors.
You may want to raise your worker_connections value. I would also sure nginx is
seeing the 32768 FDs (because you can set it in the env but it may not have the
setting in its env) by running the error log at the notice level and watching it
as you fire up or reload nginx config. If you put worker_connections up to like
4096 (even if temporary) It'll output to the log a warning if it doesn't have
access to more than 1024 FDs - with the default worker_connections at 1024 it
will not...

That's what it would seem to me. What is your proxy_connect_timeout set to? If
not set I think off the top of my head it defaults to 60s. That is a long time
for the backend servers not to complete at any volume level.

I would look hard at your upstream servers as it seems nginx may have been doing
its job fur the upstreams could not keep up. Perhaps there is a network, db, or
app level performance issue to be addressed. Or depending on the level of
traffic you simply needed 5x or 10x the number of instances to handle the load.

Well that is interesting. Perhaps the backend servers were ran out of resources
and pushed to the point of no return. At any rate I'd recommend using some
stress testing tools and trying to reproduce and watch what happens on the
upstream boxes. Probably will be quite revealing. HTH.