We've run into the same problems with our syslog server. Adding to the puzzle is that (a) we're seeing the same sort of packet loss with both rsyslog and syslog-ng, and (b) we DON'T see the problem using, e.g., "awk {print} /inet/udp/514/0/0".
On a quad-core 2.4Ghz system, we're not able to sustain much more than 50 msgs/sec (using the "loggen" program from syslog-ng) without errors. Attempting the modest rate of 1000 msgs/sec, we're seeing on the order of 70% loss. That's crazy!
I'm going to take a look at the parameters suggested by @zxcgeek, but I'm astounded at such poor performance on a stock system.
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