Correct. Because all stratum decoding is handled by small microcontroller, with just a few kilobytes of memory, it can be a problem sometimes. The theoretical requirement could be a few megabytes, so there's just no way it can be modified to handle all circumstances.
Most other pools have much smaller requirements, because they only have a simple transaction to their own wallet.
Running v0.1.10 firmware for more than 3 days with Eligius and HHTT:
"Response from pool too long" only occured once with Eligius, and S-HASH switched to HHTT after some pool rejections.
After some time it switched back, and kept working with Eligius again smoothly.
Thanks cscape for the new firmware!