The snapshot information is stored in the partition header. When there are already 500 snapshots on the data pool, this message will be displayed. The "mm snap delete all" should work to clear the database.
If this doesn't work, try the latest MM.NLM (NetWare 6.5 SP5 at least, renaming the old one just in case) and execute the "mm snap delete all" command. This was modified to also go out to the internal volume and delete all the snapshot files that have been stored there. This may be necessary to remove old snapshot files on the pool.