I created a simple class that shows what I am trying to do without any noise. Feel free to bash away at my code. That's why I posted it here.
public class Throttled : IDisposable
{
    private readonly Action work;
    private readonly Func<bool> stop;
    private readonly ManualResetEvent continueProcessing;
    private readonly Timer throttleTimer;
    private readonly int throttlePeriod;
    private readonly int throttleLimit;
    private int totalProcessed;
    public Throttled(Action work, Func<bool> stop, int throttlePeriod, int throttleLimit)
    {
        this.work = work;
        this.stop = stop;
        this.throttlePeriod = throttlePeriod;
        this.throttleLimit = throttleLimit;
        continueProcessing = new ManualResetEvent(true);
        throttleTimer = new Timer(ThrottleUpdate, null, throttlePeriod, throttlePeriod);
    }
    public void Dispose()
    {
        throttleTimer.Dispose();
        ((IDisposable)continueProcessing).Dispose();
    }
    public void Execute()
    {
        while (!stop())
        {
            if (Interlocked.Increment(ref totalProcessed) > throttleLimit)
            {
                lock (continueProcessing)
                {
                    continueProcessing.Reset();
                }
                if (!continueProcessing.WaitOne(throttlePeriod))
                {
                    throw new TimeoutException();
                }
            }
            work();
        }
    }
    private void ThrottleUpdate(object state)
    {
        Interlocked.Exchange(ref totalProcessed, 0);
        lock (continueProcessing)
        {
            continueProcessing.Set();
        }
    }
}
Latest Code
public class Throttled
{
    private readonly Func<bool> work;
    private readonly ThrottleSettings settings;
    private readonly Stopwatch stopwatch;
    private int totalProcessed;
    public Throttled(Func<bool> work, ThrottleSettings settings)
    {
        this.work = work;
        this.settings = settings;
        stopwatch = new Stopwatch();
    }
    private void Execute()
    {
        stopwatch.Start();
        while (work())
        {
            if (++totalProcessed > settings.Limit)
            {
                var timeLeft = (int)(settings.Period - stopwatch.ElapsedMilliseconds);
                if (timeLeft > 0)
                {
                    Thread.Sleep(timeLeft);
                }
                totalProcessed = 0;
                stopwatch.Reset();
                stopwatch.Start();
            }
        }
    }
}