The only thing that sounds vaugely familiar was someone who was having problems with their empeg just getting bogged down from some virus on the network (nimda?). Perhaps try it without the ethernet cable plugged in? I doubt that's it from your description though.

It also sounds like stuck jiffies, but those were fixed a while ago and were never regular for anyone.

Try reflashing a stock empeg image and see if that does anything perhaps?

Matthew