1. A computer-implemented method associated with processing log messages from a plurality of handlers that are distributed among a plurality of hosts in an application cluster, the method comprising: by one or more handlers of the plurality of handlers: (i) collecting a first set of log messages that include a coarse granularity level of detail regarding events that occur on one or more of the plurality of hosts, and storing the first set of log messages in a first buffer; (ii) collecting a second set of log messages that include a fine granularity level of detail regarding the events, and storing the second set of log messages in a second buffer; wherein the second buffer is configured as a circular buffer that includes a set number of storage slots and recycles the storage slots when full; wherein storing in the circular buffer includes overwriting an oldest log message in the circular buffer with a new log message when the circular buffer is full to recycle the storage slots; periodically transmitting to a logging appliance that includes at least a processor, the first set of log messages collected at the coarse granularity level from one or more of the plurality of handlers; analyzing the first set of log messages having the coarse granularity level to determine whether an error has been encountered; in response to detecting the error in the first set of log messages: freezing the circular buffers in the plurality of handlers to preserve the second set of log messages stored therein and to stop storing new log messages in the circular buffers; selecting a subset of the plurality of handlers to provide reports that include the second set of log messages collected at the fine granularity level from the circular buffers; and scheduling the subset of the plurality of handlers to separately transmit the reports to the logging appliance; in response to receiving the reports, combining the second set of log messages having the fine granularity level from the reports into a formal log.