While sitting in-game but not doing anything (was reading the wiki) I was suddenly disconnected with the "end of stream" message. Tried to log back in and kept going immediately to 'end of stream'.

Finally deleted and reinstalled minecraft and the problem resolved itself.

Then on another computer at my house another player had the same problem. He logged in with another account, problem gone. But went back to his first account, 'end of stream' immediately. This time, we deleted his player.dat file from the server and that also solved the problem.

Steps to Reproduce:
At the time the other guy got the error, he was setting off fireworks in creative mode.
At the time when I got the error, I was doing nothing but I was near a guy setting off fireworks.

Unable to reproduce, seems to happen randomly if you play for an hour or so.