Custom List form loading error "Error while executing web part: System.StackOverflowException: Operation caused a stack overflow"

To solve this issue either 

• SharePoint will throw the stack overflow exception if a transform takes longer than 1 second. Then in such circumstances, please break the “dvt_1.rowedit” template into smaller template.

 Or

• Microsoft has released february 2012 CU for SharePoint: http://support.microsoft.com/default.aspx?scid=kb;EN-US;2597150 where it it possible to modify the XSL tranformation timeout by using Powershell. This will fix the issue as the original timeout was hardcoded to 1 second. After installing the CU, you are able to do the following by using PowerShell:

$farm = Get-SPFarm 
$farm.XsltTransformTimeOut = 5 //timeout in seconds 
$farm.Update()