How to get output from SQL Server Insert Command with more than one row using C# ADO.Net?

Your query looks fine (except for the this.created_by / this.updated_by, which is confusing me, but... if you say it works...)

My initial thought, therefore, is: do you perhaps have an instead-of trigger that incorrectly only processes one row? Although I would expect that to report:

The target table 'dbo.Suspension' of the DML statement cannot have any enabled triggers if the statement contains an OUTPUT clause without INTO clause.

The following 3 ways of reading that sql (or a very similar version to it) all work fine:

using (var conn = new SqlConnection(connectionString))
{
    conn.Open();
    const string insertQuery = @"
INSERT INTO dbo.Suspension
(pallet_position, processing_pallet_pkey, datetime_created, datetime_updated,
[this.created_by], [this.updated_by]) 
OUTPUT INSERTED.pkey VALUES
(1, 2, '20141013 16:27:25.000', '20141013 16:27:25.000', 2, 2), 
(2, 2, '20141013 16:27:25.000', '20141013 16:27:25.000', 2, 2), 
(3, 2, '20141013 16:27:25.000', '20141013 16:27:25.000', 2, 2), 
(4, 2, '20141013 16:27:25.000', '20141013 16:27:25.000', 2, 2);";

    // via datatable
    DataTable dt = new DataTable();
    using (SqlCommand cmd = new SqlCommand(insertQuery, conn))
    using (var insertedOutput = cmd.ExecuteReader())
    {
        dt.Load(insertedOutput);
    }
    Console.WriteLine(dt.Rows.Count); // 4

    // via manual read
    var list = new List<int>();
    using (SqlCommand cmd = new SqlCommand(insertQuery, conn))
    using (var insertedOutput = cmd.ExecuteReader())
    {
        while(insertedOutput.Read())
        {
            list.Add(insertedOutput.GetInt32(0));
        }
    }
    Console.WriteLine(list.Count); // 4

    // via dapper
    var ids = conn.Query<int>(insertQuery).ToList();
    Console.WriteLine(ids.Count); // 4
}