From tommies site:
Exceeded MAX_PATCHES
When hlrad runs, it takes all the visible faces in the game, and divides them into sections called patches. These patches are the textures used as the lightmaps for the world. There is a hard limit of 65535 patches that hlrad can deal with. By default, a 64x64 game unit chunk of space is the size of one patch. If the texture scaling (not texture size) is larger or smaller, it will directly affect the lightmap size as well. This means a texture with scale of 2, will have at best 1/4th as many patches as a texture with a scale of 1.
Putting a 'box' around the level to protect from leaks is the most commmon cause of this error, beyond excessively large maps. The box causes vis to keep the faces on the outside which would normally be thrown away. These faces are then required to have lightmaps. Worst case, is that putting a box around the level will usually cause an extra 40-80% more lightmaps to be created than necessary.
Barring having a box, the other cause is large maps. The fixes are varied but can only help so far.
Remove any "box" from around your level and fight the leak leak leak war the right way.
If you have not boxed in your level, then the #1 fix is running HLRAD with the -sparse flag - but compile will be slower.
Using -chop values larger than the default 64 for hlrad will cause the light patches to be larger. However, for values larger than around 96 the map's lights start looking bad, and will more prominently show the 'staircase' effect on shadows.
Using a larger scale on large textures (dirt, rock walls, concrete) will help those large surfaces consume fewer patches for lighting.
see also: skyboxing