And I thought I had had lots of problems with PCS2...
BSP data is basically the way the mesh data is structured in a .pof, a way which makes it fast to do certain operations (such as collision detection, I believe).
I don't recall ever seeing that error before myself. According to the PCS2 code, that means that PCS_Model::BSP_CUR_DEPTH > 500 at some point, but as to how/why that might happen, I wouldn't know. Regardless, it surely indicates some kind of problem in the mesh (or a mesh that somehow bizarrely manages to cause the BSP tree recursion to go >500 levels deep).