We consider a loss model with C servers, and arriving customers are split into two classes. Of the C servers, R may be used only by the high priority class. Thus if a high priority customer sees all C servers occupied, then that customer is lost, while a low priority customer is lost if $\geq C-R$ servers are occupied. Assuming Poisson arrivals of both customer types and exponential service, we study the problem asymptotically, with $C\to\infty$ and the arrival rates comparably large. We assume that the total load is roughly equal to the number of servers, and we obtain a two-dimensional diffusion equation satisfied by the joint steady state probability distribution of the numbers of servers occupied by the two customer classes. We analyze this equation by a combination of analytic and numerical methods. Our singular perturbation analysis makes certain assumptions about not only the forms of various asymptotic expansions but also the asymptotic matching between different scales.