This may be a sever side anti-flood feature.
Most IRCD's have built in message queues (sendq) to avoid flood, in general cases they let you send so many lines instantly before it starts queueing on the server side (if client internal queue bypassed or not used). A server will only keep so many messages in the sendq for a user. After that is reached what the server does can vary, some disconnect the user (flood, sendq exceeded, etc).
It could also be a channel mode or chanserv setting designed to prevent channel flood.
If you are versed in scripting, you can create a simple dialog with just a big text area / editbox, and a 'send' button. The send button could dump the data line by line in a temporary file (or hidden window), then use the /play command to send the messages with a slightly longer delay between lines. You could then just paste the code in the box and hit send.
Another alternative, if you are just pasting privately to somebody, is to open a dcc chat window and paste it there. (since dcc bypasses the server)
Another possible cause could be the person you are pasting to, you mention 16 lines, if i remember correctly 16 lines is the amount used in Invisions default anti-flood protection.
If you are pasting for several people to see, you could also use pastebin.com.
Ok rant over, could indeed be a bug since you mention disabling flood protection and it behaving differently from mirc 6.17. But there is a few possibilities and workarounds there in any case.
