I told you not to put all those fluorescent hot pants in-game.
But they go so well with the blinking tank tops.

On serious note, did some more testing. I am pretty certain of a limit to items in item_kinds1.txt.
The limit seems to be somewhere between 911 and 919 items (to tired to narrow it down further).
Symptoms: with at least 919 or more items, crashes begin. A pretty predictable crasher is the battle time ticker (esp. in arena fights), which, after 20 seconds or so, freezes and crashes to desktop without an assertion error (just the Microsoft error thing asking if you want to send a note to Bill Gates). It also crashes some (but not all) battles. In my case, the arena time ticker crash is 100% predictable. That crash can be replicated every time.
(and no, its not something wrong with the arena items; it is the definitely the ticker.)
With 911 items or less, that crash never happens.