Very strange error, first I thought it related to PHP settings or nginx (both have all proper settings up to 1G limits and all timeouts are properly set), but then I checked with Ruby (Sinatra), and PHP's internal web server eliminating nginx, and it repeats.
Everything's fine until upload starts, then on 3M file it gets to ~70%, then upload stops, and after around 60 seconds Chrome fails with (Error 101 (net::ERR_CONNECTION_RESET): The connection was reset.) On a 30M files it stops at ~9% and error repeats.
No error logs at all. No error in nginx log, no error in php or sinatra. Nothing.
With small files <2M everything is fine. It's newly installed FreeBSD 9.1, with 16GB Ram, 80% free and 3TB disks 99% free.
Wireshark shows packet with TCP window update, then a lot of TCP Dup ACK and TCP Retransmission which leads to RST.