I had this happen on a friends computer and just about pulled my hair out. I found something that fixed the problem, but it was strange.
On their wireless router (that is also their gateway to the internet), I was able to throttle the maximum bandwidth available to each connected device (Buffalo router comes with with ww-drt). Once I throttled the connection back to 3Mb/s, iTunes match was able to complete processing their 3500 songs.
I ran a number of tests (though I didn't pull out wireshark 😟). Every time I removed the cap and the bandwidth usage spiked above 4.3 Mb/s (their connection was a 5Mb/s up from comcast), step 3 would 'crash' and it would restart the process. It didn't matter which song it was (i deleted a number of them to make sure there was no pattern in encoding, length, bitrate, etc). I charted the bandwidth and it was very consistent in it's failure whenever a bandwidth spike happened. It almost always occurred in the first five songs it was uploading. So, I am guessing that iTunes tries to upload in parallel which, depending on how they overlap, can max out the available bandwidth. The only workable theory I could decern was that either:
- the router was flaking out above a certain bit rate (i didn't see similar problems uploading large files to drop box)
- or, that the carrier was "controlling" transmission bandwidth to certain sources
- or, that Apple's servers were dropping packets when clients exceeded a certain threshhold,
- and that iTunes does not handle bandwidth issues very well (would prefer it pull back and go slower instead of restarting and never progressing).
I know most home routers are not capable of bandwidth throttling, but this is what worked for me.
