Lag? Stuttering? Is my PC, the game or something else?

Ok, first read EVERYTHING I post. This way you can see what I have tried and what info I am giving you.

First my specs:
WIN XP (SP2)
X850 XT ATI Video Card
2.5GHZ P4
2x 250GIG HD's
1 GIG ram
DSL (3MB or 5MB, forgot which)

And I am not on a wireless network and no I am not behind a firewall for this game.

The problem?:
I have been playing the game just fine for weeks with my current settings. No lag, no frame loss. The top two right bars in game are usually black. When I load a level things generally load within 10-15 seconds, unless its a store then it might take a minute or longer.

Well now for the past few days suddenly the game is acting weird. Half the time I can't TP anywhere. Whenever I do go anywhere sometimes it rezzes a chunk of it sometimes it doesn't, either way it ends up stopping and screeching to a near stand still and rezzing the rest at an incredibly slow rate! Alot of things are grey for minutes (up to 30).

In this period my Packet loss bar goes crazy! Under the Statistics bar my FPS shows me at 2-6 FPS! And my bandwiths red section about 3/4s longer then where the green line is at on it!

What I have tried:
Well since I am not stupid I tried various things.

1. I lowered all my settings in game. Muted audio, lowered all the graphics settings, cleared the cache, relogged......Nothing changed. Still the same results.

2. I reinstalled the game (advice given to me). Nothing changed.

3. I scandisked, defragged, virus checked my pc. No change. I maintain my pc all the time anyways.

4. Did a speed test of my DSL at the site I always go to and it was the same as always.

5. Even did a "system restore" to before any of this happened. Or at least to before when I though it happened.

6
. Since I though maybe it was my video card I ran a test from the cards control center and it was fine. Next I ran GMOD, a program from Half Life 2, this thing eats PCs for lunch when it comes to pushing your computer. My pc ran fine as always so I know its not my video card!

So now what?
So what could it be then? I tried everything there is. Did everything I could do on my end that I know of on my PC.

Did a recent update mess up certain PCS? Is the new number of people to much? Is my video card suddenly not accepted by the game? What?

BTW here is two screenshots from inside the game:
1. This is at the "Money Tree Directory". Usually you see signs around the room like the one on the right. But for some reason they never loaded and I got just the one after a few minutes and it had this weird writing on top of it!

2. This is of my statistic bar. Maybe it will hep you!:
http://img245.imageshack.us/img245/6985/untitled2yt8.jpg
http://img455.imageshack.us/img455/5941/untitledhu6.jpg

I just got off SL. Since I am only able to TP where I have bookmarked I went to some friends places.

I found 6 people within an hour that have been having this problem! 3 of which had it since getting the new patch today. The rest at random times within the last few days! So now we know it just isn't me!

I also did some research. I found I could rez things normally and they rezzed fast just like always. But anything else in game didn't rez the same as mentioned in my post!

Can no one do anything about this??? This is rendering the game unplayable for to many of us! This totally sucks.

How long were you in-world before you took that second screenshot?

Not sure now. I think like an hour. Because I had been asking people if anyone was having problems.

I have similar issues. My fps isnt as bad as 2-5. Its about 8-15, which goes from playable to not playable. My machine meets the minimum requirements for cpu and is over the minimum for the rest.
I'd hate to be the people who only meet the mimum requirements.

1.6 Ghz AMD Duron
1.2 GB Ram
128mb Geforce FX5200

I was just curious because the stats bar is showing 100kb to the asset server. If you've been in for an hour, that kinda seems like a lot.

How big is your inventory? Does closing the inventory window for a couple minutes make the problem better?

I have the same problems... don't waste your time adjusting your PC because it's an SL problem, not a problem with your computer. I tried everything one at a time like you. Nothing helped, so in the end i was able to determine, that i'm not insane, my PC ain't broken.... SL has issues to correct on there end.

I'm sorry but if this grey thing and super lag isn't correct, i cannot see myself coming back too much.

i'm sorry cause i really loved this world... but it's errors are too life consuming.

Its an SL issue.. my system (top specs) ran SL with all the eyecandy I could throw at it for months with over 100+ fps, over the last week or so, I get barely 25+ fps, lag, packet loss, latency issues, checked bandwidth to be no less than 4.5mbps even during peak times, nothing changed, no new programmes etc...

Its SL when they restarted/rolled back the sim servers last week when they discovered bad coding.. and they have been firefighting ever since.

From what I can deduce, they now load 'new' code onto the sim servers first, then upgrade the client at a later date, they used to do that differently, doing both at the same time.. so we live constantly in a laggy environment until they debug the sim server code to match the clients upgrades.

I call that cock blocking