Hi Mike (and Bill?),
It sounds like you're in the exact situation we were recently - a PHP update has introduced the max_input_vars configuration option which is then limiting how many form fields PHP will process (MDL-26275). Moodle 2.3 includes a workaround which decreases the number of students displayed per page in order to sidestep the max_input_vars limit, but I'm attempting to land a patch (MDL-35074) which changes the structure of the form a bit in order to deal with the max_input_vars situation in a way which doesn't involve decreasing the number of students per page.
We're still running 1.9 in production, so we were likewise (re: your other post) puzzled by this issue suddenly springing up without any changes to the code. If you'd like a hand sorting it out (I've applied a patch similar to the one mentioned above to our 1.9 production site, and it seems to be working well), drop me a line - I don't currently have a clean patch that I can share, but I can scrape something together if it's of use to you. That said, it'll have to be soon - I'm off on a month's holiday in a couple of days, so once I'm gone I probably won't be able to get back to you for a while.
-Paul