Create a Hierarchical List of Custom Taxonomies AND Posts

I’ve been working on a solution this afternoon and have come up with the following. It may not be the most elegant way of doing this though, so I’m open to further comments.

function custom_tax_list_and_posts() {

    $post_type="CUSTOM_POST_TYPE_NAME";
    $taxonomy = 'CUSTOM_TAXONOMY_NAME';

    // Get all of the parent terms in the custom taxonomy and include empty ones
    $parent_terms = get_terms( $taxonomy, array( 'parent' => 0, 'hide_empty' => false ) );

    echo '<ul>';

    // Start looping parent terms
    foreach( $parent_terms as $pterm ) :

        // Get all of the child terms within the parent term only
        $child_terms = get_terms( $taxonomy, array( 'parent' => $pterm->term_id, 'hide_empty' => false ) );

        echo '<li>';
        echo '<h3>' . $pterm->name . '</h3>';

        echo '<ul>';

        // Start looping through child terms
        foreach( $child_terms as $cterm ) :

            echo '<li>';
            echo '<h3>' . $cterm->name . '</h3>';

            // Configure custom post arguments
            $args = array(
                'post_type' => $post_type,
                'posts_per_page' => 10, // Or however many you need
                'tax_query' => array(
                    array(
                        'taxonomy' => $taxonomy,
                        'field' => 'slug',
                        'terms' => $cterm->slug
                    )
                )
            );

            query_posts($args);

            if ( have_posts() ) :

                echo '<ul>';

                // Start looping posts within child terms only
                while ( have_posts() ) : the_post();

                    echo '<li>';
                    echo '<p class="post-date">' . get_the_date('j F Y') . '</p>';
                    echo '<h3><a href="' . get_the_permalink() . '">' . get_the_title() . '</a></h3>';
                    echo '<p>' . get_the_excerpt() . '</p>';
                    echo '<a class="read-more" href="'. get_the_permalink() . '">Read more ...</a>';
                    echo '</li>';

                endwhile;

                echo '</ul>';

            endif;

        endforeach;

        echo '</ul>';

        echo '</li>';

    endforeach;

    echo '</ul>';

}

error code: 523