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It sounds like you are very profligate with the channels you add. I almost never use so many.

You should not be not be adding any VARs, CONs or ICONs by applying a bus fault. Adding these is done by the dyre operation. This is a separate operation to applying a fault.

Maybe you should add psspy.init() to your script, at the start of your loop. This slows things down, but you get a clean start. And it probably requires your to run your PSSE script from Python, than than the other way round (using PSSE to run a .py file)

In loop situations (multiple run) I sometimes get the message "dyr file in use". If this is an issue I copy and save the dyr file as a new filename for each simulation.