AJAX Call is Only Returning 100 Results from Query

As otto implied in his comment, your code execution time is probably greater then the max php execution set in max_execution_time configuration directive in your php.ini, which is usually 30 seconds.

You might be able to change that directive in php.ini or .htaccess, but it will only create a new problem as the user will have to wait a long time until the data will load. 30 seonds is usually unaccepted response time for anything.

In any case even from the UX standpoint 100 items in a dropdown is much to much. You probably need to rethink your GUI.