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I think the following logic is fundamentally broken:

        for request_event in request_iterator:
            request_entry = RequestEntry(request_event)
            # Never Run time critical mechanism inside timeout
            # mechanism because timeout mechanism only comes
            # when no other event is happening. It means under
            # heavy load there would not be a timeout event.
            if request_entry.type == "TIMEOUT":

                # Detect hosts that are dead and set their status
                # to "DEAD", and their VMs' status to "KILLED"
                dead_hosts = dead_host_detection()
                if dead_hosts:
                    logger.debug("Dead hosts: %s", dead_hosts)
                    dead_host_mitigation(dead_hosts)

Just run the code that should ALWAYS be executed prior to the if statement.