20,000 for Steps per unit will almost certainly be too much unless your encoder is 5,000 lines per rev which is unusual, try setting it to 10,000 and see if that helps.
With it set at 10,000 and Velocity at 2,500 you would require a frequency of 41.666KHz, so make sure you have the ESS plugin set to the next above that (sorry can't look as I don't have an ESS here)
One other thing to look at in the ESS plugin is the pulse for spindle, try setting it at 1 or 2. The ESS and SS do not handle the pulse width the same for a spindle as they do for an axis and this can cause issues if set too high.
One last thing is make sure you have no electronic gearing set in the servo drive.
Hood