Wasn't there a known bug in the 737 FMC that sometimes holds were calculated too big? I remember even the odd "UNABLE HOLD AIRSPACE" scratch pad message and a technical bulletin about it. Dunno if it was since fixed to be honest. If that message appeared we simply flew the hold with primary autoflight modes (heading/VORLOC) and sometimes tried to re-enter the hold which usually worked out fine. Haven't flown a hold in a few years now, over here they like their transitions instead of holds.