SQL Azure: More Intermittent Timeouts
These times where your connection is forced closed is usually an indication of throttling. I have found that the main reason for throttling is from high numbers of outstanding requests within your database. Unfortunately there are no hard limits that can be monitored to identify when this throttling occurs. The good news is that the lower limits have been documented which means you can track when you are getting close to the upper limits.
To give a plug to our Cotega monitoring service, this is one of the main things we track to allow people to be notified when they approach these upper limits. Another useful thing to do when this happens is to do a deep database diagnostics to see what expensive queries, connections, etc are occurring within your database as described on How to Perform SQL Azure Performance &amp; Diagnostics Analysis for SQL Azure.