This is really strange... only this client affected and not the other server which also running RHEL5 + PE4. Right now I'm investigating the issue caused several hours outage and I'm suspicious this behavior can be related to CPU spike caused freezing the whole machine. Is this possible?

I think I figured out why this happened :)

For this specific log source, I'm using a different destination like this

"/var/log/netlog/app/${HOST}/${PROGRAM}/${YEAR}/${MONTH}/${HOST}-${YEAR}${MONTH}${DAY}.log

I suppose, sometimes $PROGRAM is either empty, or contains strings which can cause this Spurious path issues.... can we say, using $PROGRAM in local destination is quite dangerous? :)