The following fails with the same error:
;;;;;;;;;;;;;;;;;;;;;;;;;;;

(defmacro many-forms ()
  (let ((body '()))
    (dotimes (i 20000)
      (setq body (cons '(message "more") body)))
    `(progn ,@body)))

(many-forms)

(if (eq 1 a)
    (message "dude")
  (message "else"))

;;;;;;;;;;;;;;;;;;;;;;;