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For a microgrid with a mix of distributed energy resources (DERs), major challenges on its survivability are found in the islanded condition. In particular, a sudden loss of generation or a large and fluctuating load could force the microgrid to operate near its capacity limits. Such a situation can cause a cascading collapse of the system, even when the load demand is within the DER's kW rating -as observed during several tests at the Consortium for Electric Reliability Technology Solutions (CERTS) Microgrid Test Bed. This paper analyzes the prime-mover stalling phenomena behind the system collapse. It highlights how the reserve margin of the system is lowered during transient conditions. Furthermore, two control methods are evaluated to resolve the microgrid collapse problem.