One more thing to add is that it is giving this error while executing a very simple query like following (related to the sequence service):
SET SEQUENCEVALUE = (SEQUENCEVALUE + ?)
WHERE SEQUENCENAME = ?
Default tx timeout in jboss is 5 minutes. This can be configured in conf/jboss-service.xml under "TransactionManagerService".
I would assume your SLSB does a lot of work and surpasses this 5 minute timeframe. You may have to either increase the tx timeout or split up your transaction.