That's just it. You have too many objects in your level for the map compiler to handle. There is, however, quite a few tricks:

1. Break up your level into chunks and build map entities then import the map entities into the engine. I don't know if this'll work solve the problem, but in 6.31.4, entities in a map entity don't show in WED. Use a logical grid or a system you can understand (such as objects within a given room or set of rooms).
2. Don't use a bunch of sprites. Use models and merge everything into one single model (or a model of no more than 5000 polygons). Having tons of entities nearly kills the frame rate turning 500 fps into 2 fps or lower. That's one of the many performance tips. Oh, and have the objects in the same vicinity too rather than scattered all over your level.

As an important note, do not have the nexus much above 200. Unless your target system can handle 500+ MB, I strongly advise you don't go above 200. 100 is high enough for almost any level.