SQL2008R2 : A network-related or instance-specific error

Hi,
I have utility that makes connection to database more than 5000 and performs operations. Some time it works properly for all operations, some times it gives following exception.

A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: SQL Network Interfaces, error: 26 - Error Locating Server/Instance Specified) 
Following is code for same.
After this error I m not able to connect database. But using telnet I can able to connect database, but this program is not able to proceed.

     for (int i = 0; i < 5500; i++)  &nb ...