What is the OnError setting for your test items within the Test Execution plan set to? This may need to be set to Use project's 'on error' property or continue running or stop current item. And what are you doing inside of your OnStartTest event handler? Ideally you do not want your event handler to fail because TC cannot complete its handling of the error and thus does not know what to do next. By default these event handlers just post a message to the log, but if you're creating your own custom logic within that handler, then you may want to start by fixing that fail point first.
