Here's what's causing it: The server is trying to compress packet data and failing when you mess with your inventory. Usually happens with modded items that have a lot of data attached. Quick fix: Add this line to server.properties: network-compression-threshold=-1
That turns off compression. Should fix it. If it still happens: Make sure everyone has the exact same mod versions Give your client and server more RAM (like 4-6GB each) Update your mods/Forge The inventory thing makes sense - modded items with tons of NBT data can mess up the compression. Turning it off doesn't really hurt performance on most servers.