Networking :: Huge Packet Loss On A Gigabit Link ?

I have a following configuration: 4 PCs (say, A, B, C and D), running Ubuntu or Debian, interconnected using a gigabit switch, which is connected to the Internet. Two machines (say, A and B) also have a direct private connection between them (provided by another pair of NICs).

Now, when I test the connection performance with iperf, the results vary. The private connection between A and B performs well - about 930Mbps using iperf's UDP test. Between C and D it is about 800Mbps which I find tolerable. Packet loss when running these tests is negligible.

However, when I run iperf between any of {A,B} and {C,D}, the performance significantly drops as there is a huge number of lost packets.

For example, here is the result of testing between A and C:

Why is there such a large number of packets which are generated, but lost somewhere?

A<->B private link works fine, so system level parameters on both A and B are correct. Furthermore, C<->D works ok, so I guess I shouldn't blame the switch.

Is there a per-NIC configuration that I should check or it smells like a hw problem? Problematic NICs on both A and B are of the same type - Allied Telesyn AT2916T.