I use nginx as a load balancing for backend web server.
if this upstream has n servers, and when the number of backend web server can't connect(502 or down) be equal n-1, nginx will response 502 or 503 status to client.
I did some test, only in the use of directer like:
server 10.10.1.2:7003 max_fails=NUM1 fail_timeout=NUM2;

within NUM2 second time, send request times > NUM1, the (NUM1+1)st resquest will response 502 or 503. The above will be happened.

nginx version:1.0.11, centos5.4 x86_64
this is my conf
upstream backend {
server 10.10.1.2:7003 max_fails=10 fail_timeout=100; #normal service
server 10.10.1.3:7004 max_fails=10 fail_timeout=100; #had down
server 10.10.1.4:7005 max_fails=10 fail_timeout=100; #had down
}

location / {
proxy_pass http://backend;
}

the access_log when error happened like:
1324630768.256 cas.sdo.com /cas/login?gateway=true&service=http://newkoo.com 502 10.10.1.4:7005, backend 125.64.219.39, 10.129.1.230 0.002, 0.000