Didn't really figure the WebBatch update caused the problem but that was the only recent change and I try to provide full-disclosure. Wondering if the multiple database connection calls are the issue???
Hard to say. On the surface the the problem as presented would seem to be some kind of Windows kernel bug or kernel resource limitation but that is based on a fairly limited understanding of all the factors involved. And this is not an attempt to pass the blame. It simply what the available evidence points to at this time. The actual cause may be something completely different.
I'm looking at MYSQL 5.7 which has a built-in webservice so I can avoid the 30 connection calls. That may fix the problem?
It very well may, if it reduces the number of consecutive calls to start a new WebBatch process and the problem is kernel resource related.
I don't see fast-cgi mentioned in the WebBatch help...is that just the standard setup I would have done or do I need to change something in IIS? Would that be a recommended change?
Yes, you need to create a handler mapping for *.web files with FastCgiModule as the module and webbatch.exe as the exe for your site. MSFT recommends using FastCGI. You can find step by step tutorials for setting up FastCGI on numerous sites, include MSFT's. WebBatch does not require anything special with regard to FastCGI setup.