Thumbor/NGINX 502 Bad Gateway for larger images

Question

I'm not sure if this is an issue with nginx or thumbor. I followed the instructions located here for setting up thumbor with nginx, and everything has been running smoothly for the last month. Then recently we tried to use thumbor after uploading images with larger dimensions (above 2500x2500), but I'm only greeted with a broken image icon.

If I go to my thumbor URL and pass the image location itself into the browser I get one of two response:

1) 500: Internal Server Error

or

2) 502: Bad Gateway

For example, if I try to pass this image:

http://www.newscenter.philips.com/pwc_nc/main/shared/assets/newscenter/2008_pressreleases/Simplicity_event_2008/hires/Red_Square1_hires.jpg

I get 502: Bad Gateway and checking my nginx error logs results in

2015/05/12 10:59:16 [error] 32020#0: *32089 upstream prematurely closed connection while reading response header from upstream, client: <my-ip>, server: <my-server>, request: "GET /unsafe/450x450/smart/http://www.newscenter.philips.com/pwc_nc/main/shared/assets/newscenter/2008_pressreleases/Simplicity_event_2008/hires/Red_Square1_hires.jpg HTTP/1.1" upstream: "http://127.0.0.1:8003/unsafe/450x450/smart/http://www.newscenter.philips.com/pwc_nc/main/shared/assets/newscenter/2008_pressreleases/Simplicity_event_2008/hires/Red_Square1_hires.jpg", host: "<my-host>"

If needed, here's my thumbor.conf file for nginx:

#
# A virtual host using mix of IP-, name-, and port-based configuration
#

upstream thumbor {
        server 127.0.0.1:8000;
        server 127.0.0.1:8001;
        server 127.0.0.1:8002;
        server 127.0.0.1:8003;
}

server {
    listen 80;
    server_name  <my-server>;
    client_max_body_size 10M;

    location / {
        proxy_set_header X-Real-IP $remote_addr;
        proxy_set_header HOST $http_host;
        proxy_set_header X-NginX-Proxy true;

        proxy_pass http://thumbor;
        proxy_redirect off;
    }
}

For images below this, it works fine, but users will be uploading images from their phones. How can I fix this?