I got that information from a well-connected horseman who had nothing to gain or lose by making the comment. He is kind of my mentor as I am very new at this, so I believe he was helping by giving me info to help in my decision making. He wasn't specific, but from his comments I believe it was a virus or similar problem and not a physical problem. Of interest, the buyer of the top seller for $120k on the (I believe) 3rd day at Harrisburg was the regular driver for Jeremes Jet during his racing career.
The people at Tara Hills stud which handles quite a few stallions including Jeremes Jet and Mach Three didn't see the lack of 3-year old racing success a problem. In 2008 they bred more of their mares to him than any of their other sires - and they were very handsomely rewarded for that commitment.