40% mysql connection fail rate, help need to fix problem

Hi, I have a database server and i'm getting a lot of failed connection attempts when users are using my site.  
I need help badly :)  My tables all have primary keys and my queries uses them or at least an index so i have fairly optimized queries.  The site gets about 8000-9000 members online at round the same time so I'm not sure if it's too much for the db.  No matter what changes i try in the my.cnf the Max used connections is always around 1033 but that max is reached well before peak times as when peak times comes it doesn't go higher so i end up with a lot of failed connections.   Below are some data I figured would come in handy  this is from having the database online for just 3 hours:

8 gigs Ram
Dual Xeon processor

Failed attempts          115,612          29,718.19          40.20 %
 Aborted         290,468         74,665.11         100.99 %
 Total         287,624         73,934.05         100.00 %

Total          ø per hour          ø per minute          ø per second
 24,844,858         6,386,396.92         106,439.95         1,774.00

Max used connections          1082

 Open tables          5000
 Open files         5229
 Open streams         0
 Opened tables         7584
 Created tmp disk tables          703
 Created tmp tables         976483
 Created tmp files         55
Threads cached          61
 Threads created         120944
 Threads connected         1021
 Threads running         22
 Handler read rnd          28188883
 Handler read rnd next         193420205
 Key read requests          619785900
Key reads          415910
 Qcache queries in cache          27279
 Qcache inserts         12854166
 Qcache hits         5461364
 Qcache lowmem prunes         22137
 Qcache not cached         370565
 Qcache free memory         72573336
 Qcache free blocks         20215
 Qcache total blocks         74930
 Slow queries          5062
 Sort merge passes         26
 Sort range         923143
 Sort rows         64210638
 Sort scan         621404
 Table locks immediate         14692036
 Table locks waited         2122146
My.cnf
-------datadir=/var/lib/mysql
socket=/var/lib/mysql/mysql.sock
set-variable = max_connections=2500
set-variable = interactive_timeout=30
set-variable = wait_timeout=15
set-variable = thread_cache_size=256
set-variable = connect_timeout=30
set-variable = key_buffer=256M
set-variable = join_buffer=1M
set-variable = record_buffer=512k
set-variable = sort_buffer=1M
set-variable = table_cache=5000
set-variable = thread_concurrency=4
set-variable = tmp_table_size=16M
set-variable = query_cache_type=1
set-variable = query_cache_limit=1M
set-variable = query_cache_size=100M
set-variable = max_allowed_packet=2M
set-variable = max_connect_errors=250
set-variable = max_user_connections=2500
log-slow-queries = /var/log/mysql/mysql-slow.log
long_query_time = 5


[mysql.server]
user=mysql
basedir=/var/lib

thanks for the assistance in advance.
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