No one uses png images in Flash?
This goes way back in Flash. Here is some background:
The only fix is to not have that many transparent things stacked on top of each other or to set the player quality down to a lower level.
I've also run into this problem when stacking many movie clips with cache-as-bitmap turned on. Seems like it's just a built-in limitation of the Flash player, probably as an efficiency measure.
Yes internally the player uses an array of length 24 (formally 12) to track overlapping alpha items. After that they don't get the treatment. I you lower the stage quality then the array is bypassed.