Using my trusty internet search engine (varclus "WARNING: Iteration limit exceeded in search phase"), I found this
http://support.sas.com/kb/31/857.html
Because you did not post your code, I do not know whether this note is pertinent to your problem.
See this thread also:
https://communities.sas.com/t5/SAS-Statistical-Procedures/waring-message-from-proc-varclus/td-p/354983
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