Daisy chaining hubs isn't an issue.

As others have said, you're probably going over on power.  I run those DLink hubs with 5x BE's in each, and a USB fan on one of the hubs to cool all of them...  My HWerror rate is under 1%.

I had stability issues running MinePeon, so I switched to PIckaxe... but I believe stability is much improved in MinePeon 0.2.3a or so.. ?