Hi Sameer,
We will take a look to see if we can reproduce this error. Since you have enabled regeneration from onboard memory, you should not have to worry about underflow errors, especially at a sample rate of 250 kHz.
Allowing 100 ms of delay to check for errors should not be hurting you, either, and should be a good way to prevent excessive CPU usage.
While we are looking at this, I would like to suggest that you take a look at the DAQmx driver. Starting with version 7.4, the PCI and PXI 6534 are supported in DAQmx (as well as the PXI and PCI-6533). Open the Cont Write Dig Port-Ext Clk example. Insert a DAQmx channel property node in front of the DAQmx Start Task VI. Choose the "Use Only Onboard Memory" property (Digital Output --> General Properties --> Advanced --> Data Transfer and Memory) and set it to True. That will cause the data in "pattern" to loop from the onboard memory.
Allen