Sounds very strange indeed.
The USB smooth stepper is known to stop working but when it does it crashes and burns. Nothing short of and closing Mach3 and restarting will get it working again. What you are experiencing sounds very strange.
If it helps I have mach3 and a USB smooth stepper it you would like to post a file with the first 1000 lines or so I will run do an air cut of it on my machine and see if it runs right through or stops at the same point as yours.
Cheers
Peter
The ingenuity of idiots is unlimited.
http://www.youtube.com/user/cncnutz