Don't use 30000 for the Node Offset, use 0. All you are doing with that is reducing the upper limit from 128,000 nodes to 98,000 nodes. Why would you do that?
If after that the solver gives you the same error, open the model in SpaceClaim and convert the outer solid cylinder into a midsurface to reduce the node count.
Contact adds to the element count shown in the Mesh details, so you need to be less than 128,000 if you have contact in the model.
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