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Hi Joshua,
This is indeed a problem -- I just never expected that you would be having that many events and and canceling the majority. I am sorry you had to debug this. :-(
This was anticipated by the author of pyftpdlib (Giampaolo Roloda'), who proposed an elegant solution: keep track of the number of cancelled events, and when the number gets too high (according to some measure) the heapq is simply rebuilt by filtering out cancelled events. I think this is similar to your proposal (b).
I would love it if you could implement this! Just make sure to add some tests and follow the PEP 8 style guide. You can contribute upstream to the Tulip project first. https://code.google.com/p/tulip/