Hi Les,
Let me elaborate on algor_neil's question "what material model are you using?". The material model is a setting under the part's "Element Definition" dialog. In short, the material model describes the part's stress-strain curve. I am guessing that the material model in your simulation is the default (isotropic) which means the stress-strain curve follows the modulus of elasticity (E) all the way to infinity. Since your parts are experiencing plastic deformation, you may want to use one of the "von Mises with ___ hardening" material models to account for the plastic deformation (or whatever your energy specification says is allowable.)
To answer your question "Does Simulation even know what the UTS is?", you can answer that question by viewing the material properties for the part. The analysis only knows about the material properties listed for each part. (Do not look at "Tools > Options > Manage Material Library". That shows the complete properties in the library, not the properties assigned to the part and used in the analysis.)
It is difficult to say what reason causes an MES analysis to quit because it cannot converge; that is, is the problem related to the mesh, to the model, to the input, or something else? But it is theoretically possible for a "perfect" model to converge even with unrealistic loads. It probably does not happen very often because the elements become distored which will cause a problem with convergence, or the time step to resolve a change in acceleration etc would need to be so small that the analysis just gives up ("AutoTM over limit").
