A bit late to the party, but just encountered this within Moodle 2.7.3
A multimedia subject where students have included rather large images inside a single PDF submission. I think the most annoying part is the fact that we cannot access the grading area at all, let alone once the PDF button is pressed. I will look into the time out, but currently the only way to access the grading was to disable the PDF annotate at the site level, or log in as the student and delete the submission.
Have voted and am watching your bug tracker entry.