Dynamic Pro*C SQL Requiring mult. PREPAREs. WHY?

We are trying to code a Pro*C (V1.6.8.0.0) program to loop thru a file and insert multiple records into a (variably named) table using dynamic INSERTs.

What we want to do is something like:
strcpy(string, "INSERT INTO table (....) VALUES (:x, :y)"); EXEC SQL PREPARE statement_name FROM :string; while (records exist in the file) {
  set the host variables
  EXEC SQL EXECUTE statement_name USING :hv1, :hv2; }

First, the precompile choked with PCC-S-0014 on the EXECUTE statement, saying that the statement identifier was undeclared. So we put a DECLARE statement_name STATEMENT in (which we should not have had to do) and it compiled & linked okay, but then it choked at run time after doing one insert successfully with an ORA -1001. This message does not make much sense to me.

On a side note, we were able to successfully run the program by repeatedly doing the PREPARE and EXECUTE in the loop--but it takes forever.

Also we want to add arrays to speed up the insert if we can get by this PREPARE problem.
PS: We are running Oracle 7.2.2.3.0 for what it is worth. PSS: As far as I can tell, we don't have RELEASE_CURSOR=YES set as a precompile

     option, if that matters.
ANYONE HAVE ANY IDEAS OR SEEN THIS BEFORE? TIA.

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