Nested Transactions (dblibrary Process Dead - Broken Connection)

Ok sql-masters, I'm stumped and need someone to come to the rescue.

The issue: nested transactions = dblibrary process dead; broken connection or runaway process.

On the first try it usually bombs with the dblibrary... error. If I continue trying to run it, it will run, but actually runaway.

The sp:
/****** Object: Stored Procedure dbo.UP_MR1700 Script Date: 10/03/1998 11:00:08 AM ******/
CREATE PROCEDURE UP_MR1700 AS

DECLARE @TotRecs int

TRUNCATE TABLE MR1700_WorkTable1
EXECUTE MR1700_Insert_WT1_OnHand
EXECUTE MR1700_Insert_WT1_Packed
EXECUTE MR1700_Insert_WT1_Allocated
EXECUTE MR1700_Insert_WT1_Capacity

SELECT @TotRecs = (SELECT COUNT(Store_No) FROM MR1700_WorkTable1)

IF @TotRecs = 0 OR @TotRecs IS Null
RETURN -100

TRUNCATE TABLE MR1700_WorkTable2
EXECUTE MR1700_Insert_WT2_Classes
EXECUTE MR1700_Insert_WT2_Depts
EXECUTE MR1700_Insert_WT2_ClassGroups
EXECUTE MR1700_Insert_WT2_DeptGroups
EXECUTE MR1700_Report_Request