[Puke]

nope, distance is definitly not a factor. i have had contact between races on oposite ends of the map.

if a race's planets are destroyed or captured, and they still have ships left, you will lose contact with them but you will not get the 'empire destroyed' message. this is probably what happened. someone destroyed their Last colony, you lost contact, but they still had ships (or sats, or mines) floating around somewhere.

this is also a problem that can make the 'peace' victory condition nearly impossible. if everyone is at peace, and an old enemy has been defeated but he still has a satelite in a nebulae somewhere, or an old mine floating off in space, you will lose contact with him but he wont be destroyed. so victory conditions cant be met.