If one of those lines being read has a CHR$(26) in it, that's what is causing the read to stop. Sequential files read CHR$(26) as end of file, so the file ends, regardless if there are other lines in the file past it.
Try using FOR BINARY instead of FOR INPUT. BINARY is immured to the end of file character reaction. So if the works, that was the problem.
This may not be your problem, but it is something I discovered working with sequential files many years ago, when I included CHR$(26) as an arrow symbol in a help database. As soon as the read encountered it, the file stopped being read.
Pete