What's unfortunate is that in the first day after setting up the elb we didn't have problems, but soon after we started getting reports of intermittent downtime. On our end our metrics looked clean. The elb queue never backed up seriously according to cloud watch. But when we started running our own healthchecks against the elb we saw what our customers had been reporting: in the crush of traffic at the top of the hour connections to the elb were rejected despite the metrics never indicating a problem.
Once we saw the problem ourselves it seemed easy to understand. Amazon is provisioning that load balancer elastically and our traffic was more power law than normal distribution. We didn't have high enough baseline traffic to earn enough resources to service peak load. So, cautionary tale of dont just trust the instruments in the tin when it comes to cloud iaas -- you need your own. It's understandable that we ran into a product limitation, but unfortunate that we were not given enough visibility to see the obvious problem without our own testing rig.