Focusing on sysctl: Double-check your sysctl.conf, which is usually at /etc/sysctl.conf. Here's the one for my system:

# Kernel sysctl configuration file for Red Hat Linux
#
# For binary values, 0 is disabled, 1 is enabled.  See sysctl(8) and
# sysctl.conf(5) for more details.

# Controls IP packet forwarding
net.ipv4.ip_forward = 0

# Controls source route verification
net.ipv4.conf.default.rp_filter = 1

# Do not accept source routing
net.ipv4.conf.default.accept_source_route = 0

# Controls the System Request debugging functionality of the kernel
kernel.sysrq = 0
[download]

I doubt that it could handle 1000 devices. On the other hand, you could try something like this:

Kernel sysctl configuration file for Red Hat Linux
#
# For binary values, 0 is disabled, 1 is enabled. See sysctl(8) and
# sysctl.conf(5) for more details.

# Disables packet forwarding
net.ipv4.ip_forward=0

# Disables IP source routing
net.ipv4.conf.all.accept_source_route = 0
net.ipv4.conf.lo.accept_source_route = 0
net.ipv4.conf.eth0.accept_source_route = 0
net.ipv4.conf.default.accept_source_route = 0

# Enable IP spoofing protection, turn on source route verification
net.ipv4.conf.all.rp_filter = 1
net.ipv4.conf.lo.rp_filter = 1
net.ipv4.conf.eth0.rp_filter = 1
net.ipv4.conf.default.rp_filter = 1

# Disable ICMP Redirect Acceptance
net.ipv4.conf.all.accept_redirects = 0
net.ipv4.conf.lo.accept_redirects = 0
net.ipv4.conf.eth0.accept_redirects = 0
net.ipv4.conf.default.accept_redirects = 0

# Enable Log Spoofed Packets, Source Routed Packets, Redirect Packets
net.ipv4.conf.all.log_martians = 0
net.ipv4.conf.lo.log_martians = 0
net.ipv4.conf.eth0.log_martians = 0

# Disables IP source routing
net.ipv4.conf.all.accept_source_route = 0
net.ipv4.conf.lo.accept_source_route = 0
net.ipv4.conf.eth0.accept_source_route = 0
net.ipv4.conf.default.accept_source_route = 0

# Enable IP spoofing protection, turn on source route verification
net.ipv4.conf.all.rp_filter = 1
net.ipv4.conf.lo.rp_filter = 1
net.ipv4.conf.eth0.rp_filter = 1
net.ipv4.conf.default.rp_filter = 1

# Disable ICMP Redirect Acceptance
net.ipv4.conf.all.accept_redirects = 0
net.ipv4.conf.lo.accept_redirects = 0
net.ipv4.conf.eth0.accept_redirects = 0
net.ipv4.conf.default.accept_redirects = 0

# Disables the magic-sysrq key
kernel.sysrq = 0

# Decrease the time default value for tcp_fin_timeout connection
net.ipv4.tcp_fin_timeout = 15

# Decrease the time default value for tcp_keepalive_time connection
net.ipv4.tcp_keepalive_time = 1800

# Turn off the tcp_window_scaling
net.ipv4.tcp_window_scaling = 0

# Turn off the tcp_sack
net.ipv4.tcp_sack = 0

# Turn off the tcp_timestamps
net.ipv4.tcp_timestamps = 0

# Enable TCP SYN Cookie Protection
net.ipv4.tcp_syncookies = 1

# Enable ignoring broadcasts request
net.ipv4.icmp_echo_ignore_broadcasts = 1

# Enable bad error message Protection
net.ipv4.icmp_ignore_bogus_error_responses = 1

# Log Spoofed Packets, Source Routed Packets, Redirect Packets
net.ipv4.conf.all.log_martians = 1

# Increases the size of the socket queue (effectively, q0).
net.ipv4.tcp_max_syn_backlog = 1024

# Increase the tcp-time-wait buckets pool size
net.ipv4.tcp_max_tw_buckets = 1440000

# Allowed local port range
net.ipv4.ip_local_port_range = 16384 65536
[download]

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