I've got two ideas to look at:
one is related to cross database chaining:
one command points to one database, and the other points to a different one ...which is correct?
set @muusid = '#CAELS1'
set @SQL = 'select top 10 * from bpcssql.dbo.itemmasternew_bpcs'
--set @SQL = 'execute icg.dbo.SP_MM_ITEMSTATUS ' + '''' + @muusid + ''''
the other thing is are you sure the stored procedure has SET NOCOUNT ON at the top?
you can get wierd results like you are describing if the store proc will return results, but doesn't have that command at the top.
Lowell