Error – The transaction associated with the current connection has completed but has not been disposed

This can happen when the transaction times out. You can increase the timeout for your transaction like this (use values appropriate for the expected length of your transaction). The code below is for 15 minutes:

using (TransactionScope scope = 
             new TransactionScope(TransactionScopeOption.Required, 
                                   new System.TimeSpan(0, 15, 0)))
  {
      // working code here
  }

This is why it could have worked for batchsize 500 and not for 1000.