What does the ulimit command show for the userid running the server, though? On most Linuxes, max open files is set to 1024, and this limit can not be raised by non-root users.
As said the 'ulimit' is not the problem:
$ ps -efa|grep server.py |grep -v grep
electrum 24942 1 0 06:59 ? 00:00:00 /usr/bin/python -u server.py
$ cat /proc/24942/limits
Limit Soft Limit Hard Limit Units
Max cpu time unlimited unlimited seconds
Max file size unlimited unlimited bytes
Max data size unlimited unlimited bytes
Max stack size 8388608 unlimited bytes
Max core file size 0 unlimited bytes
Max resident set unlimited unlimited bytes
Max processes 15862 15862 processes
Max open files 32768 32768 files
Max locked memory 65536 65536 bytes
Max address space unlimited unlimited bytes
Max file locks unlimited unlimited locks
Max pending signals 15862 15862 signals
Max msgqueue size 819200 819200 bytes
Max nice priority 0 0
Max realtime priority 0 0
Max realtime timeout unlimited unlimited us